The US dollar focuses on Japanese factors but lacks a clear direction.
2025-02-25
■ USD/JPY will fluctuate around 152.71 yen in the short term, as the Fed's prudent stance and the mildness of the US tariff policy make the market lack a clear direction.
■ The policy trends of the Bank of Japan and CPI data may affect the exchange rate, but it is difficult to trigger a sharp appreciation of the yen.
Last week, the US dollar rebounded against the Japanese yen (USD/JPY) for the first time in five weeks. At the beginning of the week, the strengthening of the US dollar supported the trend of USD/JPY as the US government announced a 25% tariff on imported steel and aluminum products. By mid-week, the US Consumer Price Index (CPI) in January was higher than market expectations, pushing up US Treasury yields, and USD/JPY once rebounded to the second half of 154 yen. Although the US dollar showed signs of weakness over the weekend, the market was relieved that the US government had suspended the implementation of mutual tariffs, the USD/JPY stopped falling in the first half of 152 yen and the trend became a stalemate.
This week, USD/JPY is expected to fluctuate around the 200-day moving average (152.71 yen). Federal Reserve Chairman Powell reiterated in his testimony to Congress that he would not rush to cut interest rates, and the January CPI data also confirmed this position. In addition, the market generally believes that the US government's tariff policy is not as radical as expected, so it is difficult for the foreign exchange market to change its trend in the short term.
On the other hand, Japan needs to pay attention to the speech of Bank of Japan board member Takata and the January national CPI data. If the market's expectations for the Bank of Japan (BOJ) to raise interest rates increase, USD/JPY may fall below last Wednesday's low (150.93 yen) but it is not expected to directly lead to a comprehensive appreciation trend of the yen.
■ The policy trends of the Bank of Japan and CPI data may affect the exchange rate, but it is difficult to trigger a sharp appreciation of the yen.
Last week, the US dollar rebounded against the Japanese yen (USD/JPY) for the first time in five weeks. At the beginning of the week, the strengthening of the US dollar supported the trend of USD/JPY as the US government announced a 25% tariff on imported steel and aluminum products. By mid-week, the US Consumer Price Index (CPI) in January was higher than market expectations, pushing up US Treasury yields, and USD/JPY once rebounded to the second half of 154 yen. Although the US dollar showed signs of weakness over the weekend, the market was relieved that the US government had suspended the implementation of mutual tariffs, the USD/JPY stopped falling in the first half of 152 yen and the trend became a stalemate.
This week, USD/JPY is expected to fluctuate around the 200-day moving average (152.71 yen). Federal Reserve Chairman Powell reiterated in his testimony to Congress that he would not rush to cut interest rates, and the January CPI data also confirmed this position. In addition, the market generally believes that the US government's tariff policy is not as radical as expected, so it is difficult for the foreign exchange market to change its trend in the short term.
On the other hand, Japan needs to pay attention to the speech of Bank of Japan board member Takata and the January national CPI data. If the market's expectations for the Bank of Japan (BOJ) to raise interest rates increase, USD/JPY may fall below last Wednesday's low (150.93 yen) but it is not expected to directly lead to a comprehensive appreciation trend of the yen.