During Tokyo trading hours, news that President Trump is considering a 25% tariff on Canada caused CAD/JPY to drop from 108.60 yen to 107.30 yen. Later, it recovered to the 108-yen range. However, Canada’s December CPI, announced during New York trading hours, came in at 1.8%, below the expected 1.9%, pushing CAD/JPY down to 107.59 yen.
Despite this, a strong rise in U.S. stock markets led to increased risk-taking, which caused the yen to weaken, and CAD/JPY rose to around 108.60 yen by the close. The market has mostly priced in the 25% tariff news, and instead, rising oil prices and stock markets are supporting demand for the Canadian dollar.
CAD/JPY Forecast Range: 109.20–108.00 yen
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