FX.co ★ Japanese Yen Holds Firm as Dollar Weakens

The Japanese yen held steady around 142.5 per dollar on Monday, consolidating gains after a 2% surge in the previous week. This stabilization was buoyed by a weaker US dollar, influenced by the unpredictable trade policies of President Donald Trump, which have unsettled investor confidence in US assets. Most recently, Trump threatened to impose a 50% tariff on the European Union but postponed this action shortly thereafter. Furthermore, he signaled a potential 25% tax on iPhones sold in the United States that are not produced domestically, adding another layer of uncertainty to trade policy. Domestically, investors remain focused on the Bank of Japan's policy outlook, with growing expectations that the bank may increase interest rates further in response to persistent inflation. Recent data revealed that Japan’s core inflation rate unexpectedly climbed to 3.5%—the highest it has been in over two years—strengthening the argument for continued policy tightening.