Japanese Yen Recovers from Two-Week Low as USD Weakens Ahead of US Data

Japanese Yen Recovers from Two-Week Low as USD Weakens Ahead of US Data

The Japanese Yen (JPY) rebounded from a two-week low against the US Dollar (USD) in early Thursday trading. The move comes as markets digest the US federal court’s decision to block former President Donald Trump’s proposed “Liberation Day” tariffs, which initially boosted global risk appetite and hurt safe-haven demand.

USD/JPY Retreats from 146.00 High

The USD/JPY currency pair briefly traded above 146.00, but pulled back by around 80-85 pips as intraday USD weakness set in. Traders remain cautious ahead of key US economic data, including inflation figures and the second estimate of Q1 GDP, due Friday.

Diverging BoJ-Fed Outlook Limits Volatility

Expectations for the Bank of Japan (BoJ) to raise interest rates again later this year contrast with the market’s longer-term forecast that the Federal Reserve (Fed) could cut rates in 2025. This divergence is keeping the JPY underpinned and is likely to limit further upside in the USD/JPY pair.

However, the risk-on mood globally may reduce appetite for the safe-haven Yen. Investors are treading carefully before re-entering long-JPY positions.

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• USD/JPY Technical Analysis
• What to Expect from US Inflation Data
• BoJ Monetary Policy Tracker
• Fed vs BoJ: Rate Outlook Explained