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11.03.2025, 14:18

USD/JPY surges to near 148.00 as Trump tariffs weigh on Japan’s economic outlook

  • USD/JPY rises sharply to near 148.00 as Japan is unlikely to avoid tariffs by the US.
  • An expected increase in the US JOLTS Job Openings data for January has offered temporary support to the US Dollar.
  • Both the US headline and core CPI are estimated to have decelerated in February.

The USD/JPY pair recovers strongly to near 148.00 in North American trading hours on Tuesday after posting a fresh five-month low of 146.50 earlier in the day. The pair bounces back as the Japanese Yen (JPY) slumps after comments from Japan’s trade minister Yoji Muto indicated that Japan would not be able to escape tariffs from the United States (US).

Japanese Yen PRICE Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Canadian Dollar.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   -0.74% -0.40% 0.21% 0.31% -0.08% -0.11% -0.19%
EUR 0.74%   0.35% 0.93% 1.05% 0.67% 0.64% 0.56%
GBP 0.40% -0.35%   0.61% 0.70% 0.32% 0.28% 0.22%
JPY -0.21% -0.93% -0.61%   0.08% -0.31% -0.34% -0.40%
CAD -0.31% -1.05% -0.70% -0.08%   -0.38% -0.41% -0.48%
AUD 0.08% -0.67% -0.32% 0.31% 0.38%   -0.02% -0.02%
NZD 0.11% -0.64% -0.28% 0.34% 0.41% 0.02%   -0.07%
CHF 0.19% -0.56% -0.22% 0.40% 0.48% 0.02% 0.07%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

"We did not receive a response that Japan would be exempt," Muto said after meetings with Secretary of Commerce Howard Lutnick, US Trade Representative Jamieson Greer, and White House economic adviser Kevin Hassett, Reuters report. Muto added that the US acknowledged contribution from Japanese companies to its economy, but declined to elaborate on his counterparts’ stance otherwise. Japan is the fourth largest trading partner of the US and tariffs on Japan would diminish competitiveness of Japanese products across the globe.

Trump’s tariff fears are expected to force traders to reassess expectations that the Bank of Japan (BoJ) will raise interest rates again this year.

Meanwhile, the US Dollar (USD) has discovered a temporary cushion after posting a fresh four-month low after the release of the US JOLTS Job Openings data for January. The US Bureau of Labor Statistics (BLS) reported that business owners posted 7.74 million jobs, almost in line with estimates, higher than 7.51 million seen in December. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is still down almost 0.35% near 103.50.

Going forward, investors will focus on the US Consumer Price Index (CPI) data for February, which will be released on Wednesday. Year-on-year headline inflation data is estimated to have grown by 2.9%, slower than 3% in January. In the same period, the core CPI – which excludes volatile food and energy prices – is expected to have decelerated to 3.2% from the prior release of 3.3%.

Japanese Yen FAQs

The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

 

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