The yen rose in Asian trade on Thursday against a basket of major rivals, extending gains for the second straight day against the US dollar amid active haven demand with mounting global trade uncertainty.
Recent Japanese consumer prices data showed increasing inflationary pressures on the Bank of Japan’s policymakers, boosting the odds of a rate hike in June.
The Price
The USD/JPY price fell 0.2% today to 142.53 yen per dollar, with a session-high at 142.97.
The yen rose 0.85% on Wednesday, the fourth profit in five sessions following weak US jobs data for May.
Trade Developments
US President Donald Trump described Chinese President Xi Jinping as a difficult man to make a deal with, exposing existing tensions between both sides ahead of an anticipated phone call.
Japanese Rates
Earlier data showed consumer prices in Tokyo rose 3.6% y/y in May, the fastest pace since January 2023, and up from 3.4% in April.
Following the data, the odds of a BOJ 0.25% interest rate hike in June rose from 35% to 45%.
Bank of Japan Deputy Governor Shinichi Uchida said the bank will continue to raise interest rates if the economy recovers from the negative impact of US tariffs, however he still cautioned that the economic outlook remains highly uncertain.
Now traders await more Japanese data on inflation, unemployment, and wages to gather additional clues.
US Rates
Earlier US data showed the services sectors shrank for the first time in a year, while the private sector added far less jobs than expected last month.
According to the Fedwatch tool, the odds of a Fed 0.25% June interest rate cut stood at 2%, while the odds of a July rate cut stood at 24%.
Now traders expect 50 basis points of US rate cuts overall this year, starting October.
