Japanese Yen Falls to One-Week Low Against US Dollar, but Further Drop May Be Limited
The Japanese yen dropped to its lowest level in more than a week against the US dollar, trading around 144.45. This happened as the US dollar got stronger, helped by positive economic news and improved trade talks between the US and Europe. President Trump’s move to delay higher tariffs on EU goods made markets feel more relaxed, which reduced demand for the yen, a currency often seen as a safe bet in tough times.
In Japan, a recent 40-year government bond sale didn’t go well, with very low demand. But the market didn’t react much, as this was expected. Even with this weak auction, the yen didn’t fall too much. One reason is that the Bank of Japan is still expected to keep its current policies. They have said they’ll only make changes if interest rates rise too fast.
Now, traders are watching an important US report — the core PCE data — which is coming out on Friday. This inflation report could give clues about whether the US Federal Reserve will change interest rates in the coming months.
Impact: The yen could stay weak if the dollar keeps rising. But if global markets shift or the Bank of Japan steps in, the yen might stop falling and even gain some strength.