The Japanese yen fell in Asian trade on Monday against a basket of major rivals, moving away from a five-week high against the dollar on profit-taking, and after less bullish remarks from Bank of Japan governor Kazuo Ueda.

The BOJ raised interest rates last week to a 17-year peak as investors look for more clues on the path ahead for policy normalization in Japan.

The USD/JPY rose 0.25% to 156.08, with a session-low at 155.28.

The yen rose 0.1% on Friday against the dollar, expanding the gains after a short hiatus and approaching a five-week high at 154.77.

The yen rose 0.25% last week against the dollar, marking the second weekly profit in a row. 

BOJ

The Bank of Japan voted to raise interest rates by 25 basis points at the January 23-24 meeting to 0.5%, the highest since 2008, and the third such Japanese rate hike since policy normalization started last year. 

It was an 8-1 margin vote in favor of the hike, indicating increasing confidence by Japanese policymakers in the pace of growth for wages and prices.

The BOJ decided at the March 2024 meeting to exit negative rates, and raised short-term interest rates by 20 basis points then to 0.1%, the first such hike since 2007.

Policy Statement 

The BOJ said in its policy statements that the odds of achieving its targets are increasing, as many corporations vowed to continue raising wages in yearly negotiations this year.

The central bank believes that core inflation is heading towards the 2% medium term target, with financial markets stable overall. 

It noted that real interest rates remain very low, with the bank continuing to hike rates as its economic goals are carried out.

Economic Forecasts 

The BOJ expects main consumer prices to rise 2.7% in the financial year of 2024, up from 2.5% in previous forecasts.

It estimates 2025 main consumer prices to rise 2.4%, up from 1.9% in previous forecasts.

It estimates GDP growth at 0.5% in 2024, down from 0.6% in previous forecasts, and 1.1% in 2025. 

Oil prices rose on Friday but still marked weekly losses, after US President Donald Trump called for lower energy prices and higher American production.

Reuters reported that Chevron has completed a major oil field development in Kazakhstan at a cost of $48 billion, which would raise its production to 1% of total global supplies. 

Otherwise, the dollar index fell 0.6% as of 19:49 GMT to 107.4, with a session-high at 108.1, and a low at 107.2. 

On trading, Brent March futures rose 0.25%, or 21 cents to $78.5 a barrel, but still marked a 2.9% weekly loss.

US crude futures due in March were little changed at $74.66 a barrel, but still marked a weekly loss of 3.6%.

Gold prices rose on Friday as the dollar tapered off against most major rivals, with the precious metal marking its fourth weekly profit in a row.

US President Donald Trump spoke ahead of the World Economic Forum in Davos on Thursday, in words that were aggressive, alarmist, and threatening at times. 

Trump spoke about tariffs, inflation, international relations, and said he’s going to push for lower rates in the US and worldwide. 

He believes that overspending led to a catastrophic inflationary problem and historically high interest rates.

He also sent a message to each company in the world, to come and build their products in the US with very low taxes.

The combined S&P Global PMI for the US slowed down considerably to 52.4 in January from 55.4 in the previous reading, marking a nine-month low. 

The services PMI took a hit and slowed down to 52.8 this month from December’s 56.8, marking a nine-month trough.

But the manufacturing PMI achieved growth at 50.1 this month from 49.4, beating estimates of 49.8, and marking a seven-month high.

Otherwise, the dollar index fell 0.6% as of 19:49 GMT to 107.4, with a session-high at 108.1, and a low at 107.2.

On trading, gold spot prices rose 0.6% as of 20:29 GMT to $2890.7 an ounce, with a weekly profit of 1.1%.

Ethereum rose on Friday amid mixed crypto performance as the markets follow US President Donald Trump’s statements. 

US President Donald Trump spoke ahead of the World Economic Forum in Davos on Thursday, in words that were aggressive, alarmist, and threatening at times. 

Trump spoke about tariffs, inflation, international relations, and said he’s going to push for lower rates in the US and worldwide. 

He believes that overspending led to a catastrophic inflationary problem and historically high interest rates.

He also sent a message to each company in the world, to come and build their products in the US with very low taxes.

The combined S&P Global PMI for the US slowed down considerably to 52.4 in January from 55.4 in the previous reading, marking a nine-month low. 

The services PMI took a hit and slowed down to 52.8 this month from December’s 56.8, marking a nine-month trough.

Ethereum 

On trading, ethereum rallied 5.2% as of 20:04 GMT to $3377.1, but still marked a weekly loss of 1.7%.