The Japanese yen rallied in Asian trade on Thursday against major rivals, heading for the third profit in a row against the US dollar and scaling a three-week high on haven demand.
Global financial markets have been shaken by US President Donald Trump’s aggressive tariffs against the world economies, announced yesterday.
The yen is also bolstered by a tumble in US treasury yields amid a surge in bond purchases due to concerns about a recession.
The Price
The USD/JPY fell 1.4% today to 147.11, the lowest since March 11, with a session-high at 149.24.
The yen rose 0.25% on Wednesday, the second profit in a row on strong haven demand.
US Tariffs
Global financial markets are being sold off after Trump’s attempt to reshape global trade, which was more aggressive than expected.
Trump said he’ll impose a base 10% tariffs on all imports, with much higher rates on some major partners such as China and the EU.
Japan’s Aggressive Tariffs
The American tariffs on Japanese products were more aggressive than expected at 24%.
The Nikkei index tumbled to eight-month lows, with Japanese treasury yields tumbled by the biggest percentage point since August 2024.
US Yields
US 10-year treasury yields fell by 1.85% today on track for the fifth loss in a row, plumbing a six-month low at 4.051%.
It comes as investors brace for slower US growth, which could force the Fed to enact more interest rate cuts this year.
A reduced gap between long-term Japanese and US rates would boost the appeal of Japanese yields as an investment target, in turn underpinning the yen.
