The Japanese rose in Asian trade on Monday against major rivals, expanding gains for the second straight session against the US dollar and hitting a seven-month high.

It comes amid strong haven demand as investors lose confidence in the US economy once more due to concerns about US President Donald Trump’s plans to restructure the Federal Reserve, which could impact its independence. 

Recent data showed renewed inflation pressures on Bank of Japan policymakers, raising the odds of May interest rate hike.

The Price

The USD/JPY fell 1% today to 140.60, the lowest since September 2024, with a session-high at 142.11.

The yen rose 0.2% on Friday amid calm holiday trading.

IT surged 0.95% last week against the dollar, the third weekly profit in a row following aggressive remarks by Bank of Japan officials.

Fed’s Independence 

The White House said it’s considering ways to fire Fed Chair Jerome Powell after Trump expressed urgent desires to terminate him due to disagreements about monetary policies.

Such news continue to rattle the markets, which depend heavily on the independence of the Federal Reserve from any political interference as a pivotal mainstay in the global financial system.

Japanese Rates

Recent Tokyo data showed core consumer prices rose in March, raising inflationary pressures once more on policymakers.

Bank of Japan Governor Kazuo Ueda said the central bank will continue to hike interest rates if inflation moves towards the 2% target.

He says the BOJ will monitor economic developments without prejudice due to uncertainty because of US tariffs.

Following the remarks and data, the odds of a 0.25% BOJ rate hike in May rallied from 10% to 35%.

The US dollar fell against most major rivals on Friday amid thin trading due to the Good Friday holiday.

US President Donald Trump ordered a full tariff review of US critical minerals imports in another escalation in his trade war with global trade partners.

Otherwise, Fed Chair Jerome Powell said that tariffs and the ongoing trade war between the US and the world, especially China, could weaken the Fed’s ability to contain inflation and boost US growth.

Powel expects inflation to rise and growth to slow down, but it’s still not clear which one of them needs more focus amid trade uncertainty. 

Powell said the Fed is assuming a wait and see stance until the dust clears before taking a monetary policy decision.

He also expects the economy  to move away from full employment and contained inflation targets due to the impact of tariffs.

In response, Trump criticized Powell and said his “termination couldn’t come soon enough”.

The EUR/USD are trading near a week high at $1.1400, opening the door for more gains towards the major resistance at $1.1473, followed by $1.1498, then $1.1500.

The dollar index dipped 0.1% today as of 20:01 GMT to 99.2.

Sterling rose against most major rivals on Friday after US President Donald Trump exempted cell phones and computers from his aggressive tariffs, providing some relief to tech companies.

The GBP/USD pair moved in a tight sideways range above $1.3250, heading for a weekly profit. 

Trading remains very thin due to the Good Friday holiday with global financial markets closing. 

The European Central Bank cut interest rates by 25 basis points to 2.25% as expected by most analysts today.

It’s the seventh consecutive rate cut as the ECB attempts to boost the struggling eurozone economy amid a trade war with the US.

ECB President Christine Lagarde said that tariffs represent a shock, but their impact on inflation remains unclear.

On trading, GBP/USD rose 0.2%% as of 20:05 GMT to $1.2387.

Euro inched higher on Friday against a basket of major rivals, moving in a tight range against the US dollar as most markets close for the Good Friday holiday.

The European Central Bank cut interest rates by 25 basis points this week as expected to October 2022 lows, with President Christine Lagarde describing tariffs as “a shock to demand”.

The Price

The EUR/USD rose 0.2% today to $1.1385, with a session-low at $1.1359.

The pair closed down over 0.3% on Thursday, the second loss in three days on profit taking away from a three-year peak at $1.1474.

The ECB

The European Central Bank cut interest rates by 25 basis points to 2.25% as expected by most analysts today.

It’s the seventh consecutive rate cut as the ECB attempts to boost the struggling eurozone economy amid a trade war with the US.

ECB President Christine Lagarde said that tariffs represent a shock, but their impact on inflation remains unclear.

She said the picture might not become clear by the next policy meeting in June, as the 90-day pause on tariffs would still be in place by then.

European Rates

Reports showed that some ECB officials see a high probability of a rate cut in June.

Markets are pricing in a 60% chance of an ECB rate cut in June.