Japanese Yen remains on the front foot as geopolitical risks boost safe-haven assets
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The Japanese Yen attracts buyers for the second straight day amid reviving safe-haven demand. A modest USD downtick drags USD/JPY further away from a multi-week high touched on Friday. The BoJ’s dovish pause might cap JPY gains as focus shifts to the FOMC meeting this week. The Japanese Yen (JPY) trades with a mild positive bias against its American counterpart for the second straight day on Monday amid reviving safe-haven demand, though the uptick lacks bullish conviction. Despite signs of easing US-China trade tensions, US President Donald Trump’s rapidly shifting stance on trade policies keeps investors on the edge. Furthermore, geopolitical risks weigh on investors’ sentiment and lend some support to the JPY. Apart from this, a modest US Dollar (USD) weakness drags the USD/JPY pair back closer to the 144.00 mark during the Asian session. However, the Bank of Japan’s (BoJ) dovish pause last Thursday might hold back the JPY bulls from placing aggressive bets. In fact, the BoJ slashed its forecasts for economic growth and inflation for the current year, forcing market participants to pare their bets for an immediate interest rate hike. Moreover, traders might refrain from placing aggressive USD bearish bets and opt to move to the sidelines ahead of a two-day FOMC meeting starting on Tuesday. This could act as a tailwind for the USD/JPY pair and limit any corrective slide from a multi-week high touched on Friday. Japanese Yen benefits from reviving safe-haven demand amid rising geopolitical risks, trade uncertainties China said last week it was evaluating the possibility of trade talks with the US, fueling hopes for the potential de-escalation of tensions between the world’s two largest economies. US President Donald Trump announced on Sunday a 100% tariff on all foreign-produced movies. Israeli Prime Minister Benjamin Netanyahu vowed to retaliate against Yemen’s Iran-aligned…
Filed under: News - @ May 5, 2025 3:20 am