- The USD/JPY rises slightly above 143.00 while Yen weakens for fears that Japan could face economic turbulence due to the consequences of US tariff policy.
- Ueda del Boj warned that US tariffs could harm the growth of national wages.
- The poor private employment data in the US weigh on the US dollar.
The USD/JPY pair rises 0.25% to about 143.10 during Thursday’s European negotiation hours. The pair remains firm while the Japanese Yen (JPY) works below the expected in all areas. The Japanese currency faces a strong sales pressure since the governor of the Bank of Japan (Boj), Kazuo Ueda, has warned that US tariff policy (USA) could harm the growth of national wages, a scenario that could delay the plans of the Central Bank to increase interest rates in the short term.
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 weakest currency against the Australian dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | -0.04% | 0.29% | -0.11% | -0.29% | -0.23% | 0.17% | |
| EUR | -0.06% | -0.04% | 0.25% | -0.14% | -0.34% | -0.35% | 0.14% | |
| GBP | 0.04% | 0.04% | 0.33% | -0.10% | -0.28% | -0.31% | 0.17% | |
| JPY | -0.29% | -0.25% | -0.33% | -0.42% | -0.63% | -0.61% | -0.12% | |
| CAD | 0.11% | 0.14% | 0.10% | 0.42% | -0.22% | -0.21% | 0.27% | |
| Aud | 0.29% | 0.34% | 0.28% | 0.63% | 0.22% | -0.03% | 0.49% | |
| NZD | 0.23% | 0.35% | 0.31% | 0.61% | 0.21% | 0.03% | 0.50% | |
| CHF | -0.17% | -0.14% | -0.17% | 0.12% | -0.27% | -0.49% | -0.50% |
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).
On Tuesday, Kazuo Ueda warned that US tariffs could weigh something about “the winter bonuses of Japanese companies and the salary negotiations next year with the unions,” Reuters reported. However, Ueda expressed confidence that “economic and salary growth would be re-acell, and maintain consumption in a moderately ascending trend.”
Regarding the monetary policy perspectives, Ueda del Boj declared that the increases of interest rates would become appropriate once the officials are convinced that the economy and inflation will be re-treated after a period of economic stagnation.
However, the potential for rising in the torque is expected to remain limited since the US dollar (USD) struggles to gain ground due to the disappointing economic data of the US for May, notably the poor change of employment of ADP. The US dollar index (DXY), which tracks the value of the dollar against six main currencies, seems vulnerable near the minimum of six weeks of 98.60.
On Wednesday, the ADP report showed that the private sector added new workers, which represents the lowest level since January 2021. Economists anticipated a stolen 115K hiring compared to the 60K seen in April. In addition, an unexpected decrease in the PMI of services also affected the US dollar.
Looking ahead, investors will focus on the US non -agricultural payroll data (NFP) for May, which will be published on Friday. Official employment data will influence market expectations on the monetary policy of the Federal Reserve (FED).
US dollar FAQS
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.
