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USD/JPY drops as Powell flags monetary risks, trade frictions boost Yen

  • Fed Chair Jerome Powell says there is “no risk-free path” for US monetary policy.
  • Powell's remarks deepen the US Dollar Index decline toward 99.00.
  • The JPY remains supported by market caution and renewed US-China trade tensions.

USD/JPY drops 0.30% on Tuesday to around 151.80 at the time of writing, in a cautious environment dominated by renewed US-China trade frictions. News that both countries are increasing port fees on cargo shipments has reignited fears of a deeper disruption to global trade.

The US Dollar (USD) weakens on Tuesday, with the US Dollar Index (DXY) falling toward the 99.00 area after comments from Federal Reserve (Fed) Chair Jerome Powell. He acknowledged that “there is currently no risk-free path” for monetary policy, adding that policymakers must now balance between price stability and growing risks in the labor market.

Powell’s remarks come amid increasing fragility in the US job market, following several weak data releases in recent weeks. The Fed Chair justified September’s rate cut by citing rising risks to employment, while noting that data available before the government shutdown still pointed to steady growth. He also recognized that existing tariffs are adding to inflationary pressures.

These statements strengthen expectations of further monetary easing at upcoming Fed meetings, as markets now see the rate-cut cycle likely extending into year-end.

Meanwhile, the Japanese Yen (JPY) remains well-supported by safe-haven demand and Japan’s political uncertainty, following the collapse of the ruling coalition, which weakened the position of the new Liberal Democratic Party (LDP) leader, Sanae Takaichi.

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.37%0.11%-0.36%0.00%0.30%0.04%-0.41%
EUR0.37%0.48%-0.02%0.36%0.71%0.42%-0.03%
GBP-0.11%-0.48%-0.46%-0.10%0.22%-0.02%-0.51%
JPY0.36%0.02%0.46%0.39%0.65%0.38%-0.08%
CAD-0.01%-0.36%0.10%-0.39%0.33%0.04%-0.41%
AUD-0.30%-0.71%-0.22%-0.65%-0.33%-0.29%-0.74%
NZD-0.04%-0.42%0.02%-0.38%-0.04%0.29%-0.45%
CHF0.41%0.03%0.51%0.08%0.41%0.74%0.45%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Author

Ghiles Guezout

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

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