Last week, the US dollar fell against the Japanese yen at first because long-term US interest rates went down. The exchange rate dropped below 142 yen.
But later, the dollar rose again. There was no talk about stopping the weak yen during a meeting between Japan and the US. Also, people started to think that Japan’s central bank will not lower interest rates soon. Because of this, the yen became weaker. At the same time, strong US economic data (such as inflation and jobs) made the dollar stronger. As a result, the dollar-yen rate rose to nearly 146 yen. Some investors who had sold yen earlier also changed their positions, which pushed the dollar up.
This week, there will be an important US central bank meeting. Since the latest US data was strong, people now believe interest rate cuts in the US may happen later than expected. This could help support the dollar’s strength. However, President Trump is still pressuring the central bank to cut rates. He said, “Interest rates should be lower,” and “Chairman Powell is not doing a good job.” If the central bank does not lower rates soon, Trump may speak out again.
Also, Trump thinks a weak yen causes more US trade deficits, so people should be careful if he talks about fixing the weak yen.
Today’s expected USD/JPY range: 144.50 – 145.50
This week’s expected USD/JPY range: 142.00 – 146.8
Note: This is not a guarantee of profit. Please make your own decisions when trading.