- The USD/JPY rises above 144.00 while the US dollar gains ground thanks to the surprisingly optimistic data of US Jolts employment offers.
- Trump’s attack on the independence of the Fed has decreased the credibility of the US dollar.
- The Japanese yen works below what was expected in the midst of pessimism on the commercial agreement between the US and Japan.
The USD/JPY wins strongly about 144.30 during the European negotiation session on Wednesday. The asset is strengthened as the US dollar advances before the US employment data of US for June, which will be published at 12:15 GMT.
The US dollar index (DXY), which follows the value of the dollar against six main currencies, jumps about 96.90. The DXY was abruptly recovered on Tuesday after falling near February 2022 around 96.40, after the surprisingly optimistic Jolts employment offers data.
Investors will closely follow US ADP employment data since few federal reserve officials (FED) have expressed concerns about the cooling of the strength of the labor market. Economists expect private employers to have added 95,000 new workers in June, significantly more than the 37,000 registered in May.
However, the broader perspective of the dollar remains weak, since the constant criticism of the “waiting and seeing” of the president of the Fed, Jerome Powell, by the US president Donald Trump has decreased the credibility of the US dollar.
Meanwhile, the Japanese Yen (JPY) works below what was expected on all fronts, since Trump expresses concerns about closing an agreement with Japan before the deadline of tariffs on July 9. “We have dealt with Japan. I am not sure that we are going to reach an agreement. I doubt it,” Trump said while talking to journalists at the Air Force One on Tuesday.
And in Japanese price today
The lower table shows the rate of change of Japanese Yen (JPY) compared to the main currencies today. The Japanese Yen was the weakest currency against the US dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.27% | 0.41% | 0.49% | 0.04% | 0.21% | 0.32% | 0.19% | |
| EUR | -0.27% | 0.09% | 0.19% | -0.27% | -0.04% | 0.16% | -0.07% | |
| GBP | -0.41% | -0.09% | 0.12% | -0.38% | -0.18% | 0.04% | -0.20% | |
| JPY | -0.49% | -0.19% | -0.12% | -0.45% | -0.29% | -0.12% | -0.30% | |
| CAD | -0.04% | 0.27% | 0.38% | 0.45% | 0.19% | 0.40% | 0.17% | |
| Aud | -0.21% | 0.04% | 0.18% | 0.29% | -0.19% | 0.26% | -0.01% | |
| NZD | -0.32% | -0.16% | -0.04% | 0.12% | -0.40% | -0.26% | -0.23% | |
| CHF | -0.19% | 0.07% | 0.20% | 0.30% | -0.17% | 0.01% | 0.23% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Japanese yen from the left column and move along the horizontal line to the US dollar, the percentage change shown in the picture will represent the JPY (base)/USD (quotation).
At the domestic sphere, the comments of the new member of the Bank of the Bank of Japan (Boj), Kazuyuki Masu, stating that the Central Bank should not hurry to raise interest rates have also weighed over the Japanese yen. Masu warns about persistent economic risks until an agreement with Washington is achieved.
US Dollar – Frequently Questions
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values ​​that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
