USD/JPY: Inflation concerns and central bank meetings
Week in review
The USD/JPY opened at 158.40 on 9 March amid broad dollar strength from early in the morning. The pair rose above 158.50 before retreating following reports that the G7 was discussing a coordinated release of strategic oil reserves, falling to the weekly low of 157.26 on 10 March. However, the USD/JPY then moved gradually higher due to a rise in oil prices and continued dollar strength after reports that Iran had laid naval mines. The pair reached the 159 level on 12 March and broke above the year-to-date high of 159.45 on the afternoon of 13 March, its highest level since July 2024 (Figure 1). Dollar strength continued across G10 currencies this week against the backdrop of tensions in the Middle East. However, the Australian dollar strengthened due to growing rate hike expectations, with the AUD/JPY briefly rising above 113 (Figure 2).
FIGURE 1: USD/JPY
Note: As at 14:00 JST on 13 March
Source: EBS, Refinitiv, MUFG
FIGURE 2: MAJOR CURRENCIES' RATE OF CHANGE VS USD THIS WEEK
Note: As at 14:00 JST on 13 March
Source: Bloomberg, MUFG