The Japanese yen fell in Asian trading on Tuesday against a basket of major and minor currencies, extending losses for a third consecutive day versus the US dollar and hitting its lowest level in two weeks. The decline comes amid weak expectations that the Bank of Japan will raise interest rates in September.
The US currency continued to trade in positive territory after the 90-day extension of the trade truce between the United States and China, ahead of key inflation data for July in the world’s largest economy.
The Price
• USD/JPY exchange rate today: The dollar rose 0.2% to ¥148.43 — the highest since August 1 — from an opening price of ¥148.14, with a session low of ¥147.99.
• The yen ended Monday’s session down 0.3% against the dollar, marking a second straight daily loss, pressured by a rise in US 10-year Treasury yields.
Japanese Interest Rates
• Minutes from the Bank of Japan’s June policy meeting showed some board members said the central bank would consider resuming rate hikes if trade tensions eased.
• Market pricing for a quarter-point rate increase at the September meeting is steady around 40%.
• Investors are awaiting further data on inflation, unemployment, and wages in Japan to reassess those expectations.
US Dollar
The US dollar index rose by less than 0.1% on Tuesday, holding gains for a third straight day, reflecting continued strength against a basket of global currencies.
US President Donald Trump extended the suspension of higher tariffs on Chinese goods and products for another 90 days, until early November, in a move aimed at easing trade tensions between Washington and Beijing. This helped reduce uncertainty and bolstered investor risk appetite in financial markets.
As the US and China work toward a new trade agreement, a US official told Reuters that chipmakers Nvidia and AMD have agreed to allocate 15% of their China sales revenue to the US government in order to secure export licenses for semiconductors.
According to CME Group’s FedWatch tool, markets are currently pricing an 85% chance of a 25-basis-point US interest rate cut in September and a 15% chance of no change.
Investors later today await the release of key US inflation data for July, which will indicate how much the recent tariff increases have affected prices and the extent of inflationary pressures facing Federal Reserve policymakers.
Yen Performance Outlook
At Economies.com, we expect the yen to remain in negative territory against the US dollar, especially if US inflation data comes in hotter than market expectations.
