FX.co ★ Yen Weakens as Trade Deals Dampen Haven Demand

The Japanese yen weakened to around 148 per dollar on Monday, registering its third consecutive session of declines. This movement comes amidst a series of trade agreements between the US and key global partners, which have diminished the demand for safe-haven assets. Over the weekend, the United States and the European Union reached an agreement to lower tariffs to 15% on most EU exports, down from the previously threatened 30%. Additionally, the US recently reached deals with other significant partners, including Japan and Indonesia, alleviating global trade tensions and reducing the demand for the yen. Market participants are also keeping an eye on the US-China trade negotiations, which will commence today in Stockholm, where a wider array of issues beyond merely tariffs is expected to be discussed. In terms of policy, the Bank of Japan is scheduled to announce its latest monetary decision this week. While it is broadly anticipated that the central bank will maintain interest rates at their current levels amidst the uncertainties tied to US tariffs, it is expected to revise its inflation forecast upward in its quarterly outlook.