The Japanese yen rushed to one-week highs on Monday against the dollar, expanding the gains for the third straight session on strong investor demand. 

Recent data showed Japan’s fourth quarter GDP growth accelerated, in turn raising pressure on Bank of Japan policymakers and boosting the odds of a Japanese rate hike in March.

The Price

The USD/JPY pair fell 0.45% today to 151.50 yen per dollar, the lowest since February 10, with a session-high at 152.38.

The yen closed up 0.35% on Friday against the dollar as US treasury yields dropped.

The yen lost 0.6% last week against the dollar, marking the first weekly loss in five weeks, moving away from two-month highs.

Japan’s GDP

Official data showed Japan’s GDP growth at 0.7% in the fourth quarter of 2024, easily beating estimates of a 0.3% rise, and up sharply from a 0.3% growth rate in the third quarter.

Japanese Rates

Following the data, the odds of a Bank of Japan 0.25% interest rate hike at the March meeting rose from 75% to 80%.

Now traders await more data on Japan’s inflation, unemployment, and wages before the March meeting.

Interest Rate Gap

The US-Japan interest rate gap is standing at 400 basis points in favor of the US, and any signs of a reduction in the gap would boost the standing of the yen.

Oil prices fell on Friday as concerns about the Russian-Ukrainian war faded away with a peace deal seeming more likely than ever now, which could push the US to lift its sanctions on Russia energy exports. 

US President Donald Trump said both Ukrainian and Russian presidents expressed desire for peace during separate phone calls with him.

Trump said he directed US officials to commence talks aimed at ending the war in Ukraine as quickly as possible.

On trading, Brent April futures fell 0.4%, or 28 cents to $74.74 a barrel, with a weekly profit of 0.1%.

US crude futures due in March slipped 0.75%, or 55 cents to $70.74 a barrel, with a weekly loss of 0.4%.

Gold prices fell on Friday even as the dollar declined against most major rivals, with the precious metal still heading for the seventh weekly profit in a row. 

President Trump announced plans to increase tariffs on other countries in proportion to their own tariffs on US imports, with the aim of squashing trade imbalances with US trade partners. 

Trump threatened tariffs of upwards to 100% on BRICS countries, including Brazil, China, and India. 

White House officials said the tariffs won’t get into immediate effect, and would give countries the chance to negotiate new conditions. 

Earlier data showed US retail sales fell 0.9% m/m in January, while analysts expected a 0.1% drop.

However, as recent inflation data blew past estimates, the Federal Reserve is still likely to maintain interest rates unchanged for an extended duration.

Otherwise, the dollar index fell 0.5% as of 20:03 GMT to 106.7, with a session-high at 107.1, and a low at 106.5. 

On trading, gold spot prices fell 1.7%, or $50.30 as of 20:09 GMT to $2895 an ounce, with the metal still marking a weekly profit of 0.5%.

Most US stock indices fell on Friday amid ongoing concerns about global trade.

President Trump announced plans to increase tariffs on other countries in proportion to their own tariffs on US imports, with the aim of squashing trade imbalances with US trade partners. 

Trump threatened tariffs of upwards to 100% on BRICS countries, including Brazil, China, and India. 

White House officials said the tariffs won’t get into immediate effect, and would give countries the chance to negotiate new conditions. 

Earlier data showed US retail sales fell 0.9% m/m in January, while analysts expected a 0.1% drop.

However, as recent inflation data blew past estimates, the Federal Reserve is still likely to maintain interest rates unchanged for an extended duration.

On trading, Dow Jones rose 0.2% as of 17:22 GMT to 44,602 points, while S&P 500 shed 0.1%, or 3 points to 6112 points, as NASDAQ added 0.1%, or 7 points to 19954 points.