The Japanese yen strengthened in Tokyo on Monday as risk-averse investors reacted to President Trump’s threat of a 25% tariff on Colombia, causing the USD/JPY to drop to 155.30. However, after Colombia agreed to accept more immigrants under pressure from Trump, the yen weakened.
Later, concerns over a Chinese AI company, DeepSeek, threatening U.S. businesses pushed the USD/JPY further down to 153.72. In the New York market, as stock prices recovered and fears eased, the USD/JPY bounced back to around 154.70 by the close.
If Trump continues to use tariffs to gain an advantage in negotiations, inflation worries may ease. Additionally, there is a chance that he will pressure the Federal Reserve to lower interest rates, which could limit the dollar’s strength.
Before next week’s FOMC meeting, significant declines in the USD/JPY are unlikely.
USD/JPY Forecast Range: 155.00–153.70
Note: The above is not a guarantee of profit. Make your own decisions when trading.