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USD/JPY strengthens as Trump’s softer stance on China boosts US Dollar demand

  • The Japanese Yen weakens as risk sentiment improves after Trump softens his rhetoric on China.
  • Trump says 100% tariffs on Chinese imports “not sustainable,” confirming plans to meet Xi at the APEC Summit in South Korea.
  • Reuters poll shows Japan’s core inflation likely re-accelerated in September, supporting a cautious BoJ stance.

The Japanese Yen (JPY) weakens against the US Dollar (USD) on Friday, with USD/JPY rebounding after slipping to two-week lows earlier in the Asian session. The recovery comes as the Greenback regains footing after President Donald Trump softened his rhetoric on China, helping stabilize risk sentiment and lift the Dollar across the board.

At the time of writing, USD/JPY is trading around 150.38, erasing intraday losses after bouncing off a session low near 149.38. The move reflects renewed demand for the USD as investors unwind defensive positions heading into the weekend.

Speaking on Friday, President Trump said his plan to impose 100% tariffs on all Chinese imports “is not sustainable”, signaling a step back from his earlier hardline tone. He also confirmed he expects to meet Chinese President Xi Jinping at the upcoming APEC Summit in South Korea.

On the monetary policy front, traders are now fully pricing in back-to-back 25-basis-point rate cuts by the Federal Reserve (Fed) at its October and December meetings, according to the CME FedWatch Tool.

St. Louis President Alberto Musalem, speaking on Friday, said the central bank should avoid a “preset course” and pursue a balanced approach to policy. He noted that monetary settings are “somewhere between restrictive and neutral,” adding he could support another cut if risks to jobs rise and inflation remains contained. Musalem also cautioned that there is limited room before further easing would make policy accommodative.

Meanwhile, earlier on Friday, Bank of Japan (BoJ) Governor Kazuo Ueda reiterated that policymakers have “no preconceptions” about their next step and need to “examine more data” before deciding on any potential October adjustment. He emphasized vigilance toward global uncertainty and domestic wage momentum.

According to OIS pricing, markets now assign only a 10-20% chance of a rate hike at the October 29 -30 meeting, with a bias toward holding policy steady until inflation and growth confirm a durable uptrend.

A recent Reuters poll showed Japan’s core Consumer Price Index (CPI) likely re-accelerated to 2.9 percent YoY in September, up from 2.7 percent in August, suggesting underlying price pressure remains firm but not yet consistent with the BoJ’s sustainable 2 percent target.

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 Euro.

USDEURGBPJPYCADAUDNZDCHF
USD0.13%0.12%-0.03%-0.15%-0.02%-0.01%-0.10%
EUR-0.13%-0.02%-0.16%-0.27%-0.15%-0.12%-0.22%
GBP-0.12%0.02%-0.14%-0.26%-0.13%-0.12%-0.21%
JPY0.03%0.16%0.14%-0.12%0.00%-0.00%-0.08%
CAD0.15%0.27%0.26%0.12%0.12%0.15%0.05%
AUD0.02%0.15%0.13%-0.01%-0.12%0.00%-0.08%
NZD0.01%0.12%0.12%0.00%-0.15%-0.01%-0.08%
CHF0.10%0.22%0.21%0.08%-0.05%0.08%0.08%

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

Vishal Chaturvedi

I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.

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