Yen reaches two-week high after aggressive BOJ remarks
The Japanese yen rose in Asian trade on Monday for the fifth straight session against the US dollar, scaling a two-week high following bullish remarks by the Bank of Japan’s Deputy Governor, which boosted the odds of a rate hike this year.
The gains are also boosted by higher haven demand after Moody’s US credit cut, which renewed concerns about US financial stability.
The Price
The USD/JPY price fell 0.55% today to 144.80, the lowest since May 8, with a session-high at 145.45.
The yen rose 0.1% against the dollar on Friday, marking the fourth daily profit in a row, however, the yen still marked a weekly loss of 0.2% last week as global trade tensions cooled.
Aggressive Remarks
Bank of Japan Deputy Governor Shinichi Uchida said the bank will continue to raise interest rates if the economy recovers from the negative impact of US tariffs, however he still cautioned that the economic outlook remains highly uncertain.
During a Diet session, Uchida said that main inflation will likely settle near the bank’s 2% target as log as local economic activities pick up.
Japanese Rates
Following the remarks, the odds of a BOJ rate hike in June rose from 25% to 30%.
Now traders await important Japanese data on inflation, unemployment, and wages to gather more clues.
US Credit Rating
Moody’s cut US sovereign rating by one notch on Friday, becoming the last major rating agency to do such a step.
Moody’s pointed to the growing US debt burden, which reached a record $36 trillion, reflecting the structural fiscal challenges facing the world’s largest economy.
US dollar climbs as trade tensions continue to cool
The US dollar rose against most major rivals on Friday as the US-China trade tensions continued to calm down.
Even as the US reached a preliminary trade deal with China, concerns remain about the high tariffs and their impact on corporations.
From his side, Fed Chair Powell warned against the increasing likelihood of supply shocks and subsequent high prices, and added the bank will adjust its outlook to accommodate such changes.
JPMorgan CEO Jimmie Damon also warned that recession risks remain for the US economy amid the ongoing impact of the tariffs on the global economy.
According to the University of Michigan’s survey, the US consumer confidence index fell to 50.8 in May from 52.2 in April.
Otherwise, the dollar index rose 0.2% as of 19:50 GMT to 101.08, with a session-high at 101.2, and a low at 100.5.
Aussie
The AUD/USD price fell 0.1% as of 20:14 GMT to $0.6406.
Loonie
The Canadian dollar fell 0.2% against its US counterpart to $0.7151.
Gold declines and marks a 5% weekly loss
Gold prices fell on Friday as the dollar rose against most major rivals while trade tensions cooled as investors shunned off the safe haven.
US two-year treasury yields fell by 3.9 basis points to 3.934%, while 10-year note yields fell by 6.1 basis points to 4.394%, as 30-year note yields fell by 6 basis to 4.861%.
Even as the US reached a preliminary trade deal with China, concerns remain about the high tariffs and their impact on corporations.
From his side, Fed Chair Powell warned against the increasing likelihood of supply shocks and subsequent high prices, and added the bank will adjust its outlook to accommodate such changes.
JPMorgan CEO Jimmie Damon also warned that recession risks remain for the US economy amid the ongoing impact of the tariffs on the global economy.
Otherwise, the dollar index rose 0.2% as of 19:50 GMT to 101.08, with a session-high at 101.2, and a low at 100.5.
On trading, gold spot prices fell 1.2% as of 19:50 GMT to $3189.4 an ounce, with a weekly loss of 4.7%.
Wall Street gains some ground in early trading
Most US stock indices gained ground on Friday as recession concerns receded and US-China trade tensions continued to cool.
US two-year treasury yields fell by 3.9 basis points to 3.934%, while 10-year note yields fell by 6.1 basis points to 4.394%, as 30-year note yields fell by 6 basis points to 4.861%.
Despite the temporary US-China trade agreement, concerns remain about high tariffs and their impact on local US businesses.
Fed Chair Jerome Powell warned against the increasing likelihood of supply shocks and higher prices in upcoming years, asserting the Fed will readjust its outlook to accommodate such changes.
JPMorgan CEO Jimmy Damon stated that recession risks remain for the US due to the ongoing impact of tariffs.
On trading, Dow Jones fell 0.1% as of 17:38 GMT, or 74 points to 422,48 points, while S&P 500 rose 0.1%, or 3 points to 5919 points, as NASDAQ added 0.1% to 19,138 points.