Yen

Despite the sharp declines seen in USD/JPY in recent sessions, a recovery of nearly 1% has been observed, favoring the U.S. dollar.

To say markets were volatile on Thursday following the confirmation of Trump’s tariffs would be quite an understatement. Wall Street futures suffered their worst day since the pandemic, the US dollar tumbled and even gold had a rough day for once. But it is worth nothing the CHF outperformed JPY for safe haven flows, amid an extremely volatile day for currency traders.

The Japanese yen was the weakest currency on Thursday, with traders lowering their expectations of a BOJ hike in light of Trump's tariffs. GBP/JPY was the outperformer as traders are also lowering their expectations of BOE cuts. But whether USD/JPY can break out above its 200-day EMA and the 152 handle likely requires a soft set of inflation figures from Tokyo and a stronger-than-expected US PCE report today.

The anticipated bounce on the US dollar index is finally underway, Wall Street indices enjoyed their best day in just over a week and the Japanese yen was broadly lower as the week kicked off with a risk-on tone.

One day after the Federal Reserve’s decision, USD/JPY remains neutral, with a daily variation of less than 0.5% in the last few trading hours.

USD/JPY has lost nearly 1% of its value over the last two trading sessions, allowing the Japanese yen to regain ground against the U.S. dollar.

The USD/JPY has lost more than 1.5% of its value over the last six trading sessions, allowing the Japanese yen to regain ground against the prolonged bullish trend favoring the US dollar.

USD/JPY has risen by approximately 8% since late October, primarily favoring the US dollar and pushing the yen into a constant bearish zone.

Commodity FX pairs have failed to make much ground from the weaker yen, and with the RBA opening the door to cuts than I suspect the currency bounce on AUD/JPY could provide futile. And that there could be another large drop on the horizon..

A less-dovish BOJ may have strengthened the yen while weak tech earnings weighed on Wall Street Thursday, but these patters could persist on Friday if they follow their usual pre-election path looking, according to historical data.