Gold gives up two-week high on profit-taking

The Japanese yen  rose in Asian trade on Monday against a basket of major rivals, expanding gains for the second straight session against the dollar and hitting a four-week high on haven demand amid concerns about US debt levels following Trump’s tax reform bill.

The gains are boosted as well by increasing inflationary pressures on Bank of Japan’s policymakers, which boosted the odds of a rate hike in June.

The Price

The USD/JPY fell 0.25% today to 142.22 yen per dollar, the lowest since April 30, with a session-high at 143.08.

The yen rose 1% on Friday on the dollar, the eighth profit in nine days on haven demand as Trump threatened the EU and Apple with new tariffs.

The yen also rose 2.1% last week against the dollar, marking the first weekly profit in five weeks, and the largest in a month and a half on growing concerns about US financial stability.

US Debt Levels

US President Donald Trump said on Sunday that his tax reform bill will likely undergo big changes in the Senate.

According to the Congressional Budget Office, the bill will add $3.8 trillion to the government’s $36.2 trillion debt pile in the next ten years.

The huge US debt burden is back in the spotlight after Moody’s US credit rating downgrade last week and weak demand on government notes.

Japanese Rates

Earlier Japanese data showed consumer prices rose 3.5% in April, the highest pace since early y023, beating estimates of 3.4%, and up from 3.2% in March.

Following the data, the odds of a Japanese 0.25% interest rate hike in June rose from 30% to 40%.

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 important Japanese data on inflation, unemployment, and wages to gather more clues.