The USD/JPY pair climbed past 149.50 on Thursday as traders reacted to Donald Trump’s latest remarks, sparking volatility in currency markets. Investors closely monitored the speech for any policy signals that could impact U.S. economic outlook and Federal Reserve expectations, keeping the dollar in focus.
The speech, which touched on economic and trade policies, initially led to some uncertainty in the markets. However, dollar demand remained strong, driven by expectations that the Federal Reserve could keep interest rates elevated for longer. This provided further support for the USD/JPY pair, pushing it higher despite broader market caution.
Meanwhile, the Japanese yen struggled as safe-haven flows remained subdued. While global uncertainty typically boosts demand for the yen, expectations of a more accommodative stance from the Bank of Japan (BoJ) have kept the currency under pressure. If the BoJ maintains its ultra-loose policy while the Fed holds firm on rates, USD/JPY could see further upside in the near term.
The movement in U.S. Treasury yields also played a key role in the dollar’s strength. A rebound in bond yields supported the greenback, making it more attractive relative to lower-yielding currencies like the yen. If yields continue to rise, the dollar’s momentum could extend beyond the 150.00 psychological barrier.
Looking ahead, traders are watching key U.S. economic data, including inflation and labor market indicators, to gauge whether the Fed will maintain its hawkish stance. Any signs of persistent inflation could reinforce rate hike expectations, keeping the dollar strong against the yen.
For now, USD/JPY remains in an uptrend, with market sentiment leaning in favor of the greenback. While geopolitical risks and shifting central bank policies could introduce volatility, the pair’s upside bias remains intact as long as the dollar stays supported by economic fundamentals.
