FX.co ★ Japanese Yen Strengthens on Dollar Weakness

The Japanese yen appreciated to over 145 against the US dollar on Monday, extending its gains for the fifth straight session, as the US dollar weakened in response to Moody’s downgrading of the US credit rating. On Friday, Moody’s downgraded the US credit rating from Aaa to Aa1, highlighting the deteriorating fiscal situation and the lack of effective policy measures to tackle rising budget deficits. Within Japan, recent economic reports revealed a contraction in Japan's GDP for the first quarter of 2025, underperforming market predictions and marking the nation's first economic downturn in a year. Investors are now focusing on the forthcoming Japanese trade data, as impending US tariff measures remain a significant concern. In a related development, Prime Minister Shigeru Ishiba reiterated that Japan would not agree to any initial agreement that does not include provisions regarding automobiles, pressing the US to remove its 25% tariff on Japanese vehicles.