The US dollar retreated against the Japanese yen, slipping below the 155.00 mark as escalating trade war tensions dampened investor sentiment and fueled demand for safe-haven assets. Concerns over renewed US-China trade disputes triggered a risk-off mood in global markets, pushing the yen higher as investors sought stability.
The pullback in USD/JPY came as traders reacted to fresh developments in the ongoing trade conflict, with fears that additional tariffs could weigh on global economic growth. This shift in sentiment boosted the yen’s appeal, traditionally seen as a safe-haven currency during periods of heightened geopolitical and economic uncertainty.
Meanwhile, the US dollar faced additional pressure from declining US Treasury yields, as investors moved into government bonds amid growing concerns over the impact of trade tensions on future economic performance. The combination of weaker yields and risk aversion limited the dollar’s upside potential, despite the Federal Reserve’s hawkish stance on interest rates.
Looking ahead, market participants will closely monitor further developments in the US-China trade negotiations, as well as key US economic data that could influence the Fed’s policy outlook. Any signs of progress in easing trade tensions may reverse the yen’s gains, while continued uncertainty could keep USD/JPY under pressure.
For now, the yen remains in demand, with trade-related risks and shifting market sentiment driving the pair’s movement. Unless tensions ease significantly, USD/JPY may struggle to regain momentum above the 155.00 level in the near term.
