USD/JPY was trading around 159.50 on Tuesday, up a moderate 0.07% on the day, after briefly falling below 159.00 following a policy decision by the Bank of Japan (BoJ). The pair quickly recovered most of its losses, helped by renewed demand for the US dollar (USD) amid continued geopolitical risks.
The Bank of Japan left its key interest rate unchanged at 0.75%, as expected, but took a more hawkish stance than expected. The divided 6-3 majority vote, in which three members supported an interest rate raise, combined with an upward revision of inflation forecasts, strengthens expectations for a tightening of monetary policy this summer. Governor Kazuo Ueda stressed that real interest rates remain significantly low and warned of the risk of rising inflation, strengthening the hawkish stance.
This tighter stance initially supported the Japanese yen (JPY), supported by intervention warnings from Japanese authorities in response to currency volatility. However, growth in the Japanese yen (JPY) remains constrained by economic concerns over energy supply disruptions, especially around the Strait of Hormuz, which are negatively impacting an economy that is heavily dependent on energy imports.
At the same time, the US dollar (USD) is gaining its sheltered haven status in an uncertain environment. Continued tensions between the United States (US) and Iran, as well as the lack of progress in diplomatic talks, maintain a risk-off mood. This situation supports the dollar and allows USD/JPY to rebound despite the BoJ’s hawkish signals.
Meanwhile, data from the US showed good consumer sentiment, with the Conference Board’s consumer confidence index rising to 92.8 in April. This relative strength of the U.S. economy, combined with expectations that the Federal Reserve (Fed) will leave interest rates unchanged in the 3.5%-3.75% range, continues to support U.S. profitability and, by extension, the U.S. dollar.
MUFG analysts believe the yen’s rebound may prove momentary, noting that miniature positions in the Japanese currency are being rebuilt in the face of unfavorable external conditions. BNY economists highlight the growing risk of stagflation in Japan, while Danske Bank sees an increasing likelihood of an interest rate hike this summer. TD Securities also notes that a low-liquidity Golden Week period could raise the risk of intervention if the pair continues to rise.
Today’s US dollar price
The table below shows the current percentage change of the United States Dollar (USD) against the major listed currencies. The US dollar was strongest against the Swiss franc.
| USD | EUR | GBP | JPY | BOOR | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.12% | 0.18% | 0.11% | 0.38% | 0.13% | 0.41% | 0.47% | |
| EUR | -0.12% | 0.06% | -0.02% | 0.24% | -0.01% | 0.25% | 0.35% | |
| GBP | -0.18% | -0.06% | -0.06% | 0.19% | -0.05% | 0.21% | 0.29% | |
| JPY | -0.11% | 0.02% | 0.06% | 0.27% | 0.02% | 0.28% | 0.35% | |
| BOOR | -0.38% | -0.24% | -0.19% | -0.27% | -0.25% | 0.00% | 0.09% | |
| AUD | -0.13% | 0.01% | 0.05% | -0.02% | 0.25% | 0.27% | 0.37% | |
| NZD | -0.41% | -0.25% | -0.21% | -0.28% | -0.01% | -0.27% | 0.07% | |
| CHF | -0.47% | -0.35% | -0.29% | -0.35% | -0.09% | -0.37% | -0.07% |
The heat map shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column and the quote currency from the top row. For example, if you select the US dollar from the left column and move along the horizontal line to the Japanese yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
