Yen readies to mark weekly profit on haven demand

The Japanese yen rose in Asian trade on Friday against a basket of major rivals, resuming gains against the US dollar and approaching a two-week high and a weekly profit on strong haven demand amid concerns about US financial stability.

Earlier Tokyo data showed inflation rose to a two-year peak, showcasing the inflationary pressures facing the Bank of Japan’s policymakers, and bolstering the odds of a Japanese rate hike in June.

The Price

The USD/JPY fell 0.% today to 143.44 yen per dollar, with a session-high at 144.07.

The yen lost 0.25% on Thursday against the greenback, snapping a seven-day winning streak, the longest since April 2021 on profit-taking away from a two-week high at 142.80.

Weekly Trades 

The yen is up 1.5% so far this week against the dollar, on track for the first weekly profit in five weeks.

US Financial Stability

After Moody’s decision to cut the US credit rating last week, the investor focus turned to the massive US debt reaching $36 trillion, and to Trump’s new tax reform bill, which would add trillions to this burden.

Trump described the legislation as a “big beautiful bill”, and has already passed the House of Representatives and headed to the Senate where it’s expected to face months of discussions and changes.

Inflation

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.