- The USD/JPY descends about 147.70 while the Japanese yen firmly quotes.
- Japan’s prime minister, Istiba, lost control in the upper house on Sunday.
- The US dollar corrects even though operators reduce moderate bets on the Fed.
The USD/JPY pair renounces the initial recovery movement and slides about 147.70 during the European session on Monday. The pair faces sales pressure since the Japanese Yen (JPY) exceeds all currencies, after the result of Japan’s parliamentary elections on Sunday.
And in Japanese price today
The lower table shows the rate of change of Japanese Yen (JPY) compared to the main currencies today. Yen Japanese was the strongest currency against the New Zealand dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.24% | -0.38% | -0.22% | -0.05% | -0.04% | 0.09% | -0.28% | |
| EUR | 0.24% | -0.06% | 0.02% | 0.18% | 0.15% | 0.14% | -0.08% | |
| GBP | 0.38% | 0.06% | -0.14% | 0.29% | 0.24% | 0.42% | 0.18% | |
| JPY | 0.22% | -0.02% | 0.14% | 0.19% | 0.22% | 0.27% | 0.12% | |
| CAD | 0.05% | -0.18% | -0.29% | -0.19% | 0.06% | 0.13% | -0.28% | |
| Aud | 0.04% | -0.15% | -0.24% | -0.22% | -0.06% | 0.07% | -0.10% | |
| NZD | -0.09% | -0.14% | -0.42% | -0.27% | -0.13% | -0.07% | -0.24% | |
| CHF | 0.28% | 0.08% | -0.18% | -0.12% | 0.28% | 0.10% | 0.24% |
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).
In Monday’s session, Japanese markets remained closed due to sea day.
As expected, the ruling coalition party of Japan, led by Prime Minister Shigeru Ihiba, failed to reach the threshold of 50 seats and lost the majority in the upper house. However, Ishiba has expressed confidence that it will remain in power, but political uncertainty will continue to persist due to the absence of control over both cameras. Ishiba lost control of the lower house in October.
In addition, uncertainty about commercial discussions between the United States (USA) and Japan could weaken the strength of Japanese Yen. The US president, Donald Trump, has already imposed 25% tariffs on Japan imports. However, Tokyo has expressed confidence that he will reach an agreement before the deadline of tariffs.
Meanwhile, the US dollar (USD) corrects after a pause in the rally seen this month amid commercial tensions between the US and the European Union (EU). The dollar index (DXY), which tracks the value of the dollar against six main currencies, goes back to about 98.15 from the maximum of four weeks around 99.00.
At the domestic sphere, operators reduce moderate bets on the Federal Reserve (FED) since the latest consumer price index (ICC) report for June indicated that the prices of imported goods in the US have increased.
Japanese – frequent questions
The Japanese Yen (JPY) is one of the most negotiated currencies in the world. Its value is determined in general by the march of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of the Japanese and American bonds or the feeling of risk among the operators, among other factors.
One of the mandates of the Bank of Japan is the currency control, so its movements are key to the YEN. The BOJ has intervened directly in the currency markets sometimes, generally to lower the value of YEN, although it abstains often due to the political concerns of its main commercial partners. The current ultralaxy monetary policy of the BOJ, based on mass stimuli to the economy, has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to fight against inflation levels of decades.
The position of the Bank of Japan to maintain an ultralaxa monetary policy has caused an increase in political divergence with other central banks, particularly with the US Federal Reserve. This favors the expansion of the differential between the American and Japanese bonds to 10 years, which favors the dollar against Yen.
The Japanese Yen is usually considered a safe shelter investment. This means that in times of tension in markets, investors are more likely to put their money in the Japanese currency due to their supposed reliability and stability. In turbulent times, the Yen is likely to be revalued in front of other currencies in which it is considered more risky to invest.
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.
