Week in review

The USD/JPY opened the week at 156.86. The pair moved into the 157 range and then continued to rise in stages as the dollar strengthened following weekend reports that negotiations between the US and Iran were proving difficult. US Treasury Secretary Scott Bessent held talks with Prime Minister Sanae Takaichi, Finance Minister Satsuki Katayama, and other officials on 12 May during his visit to Japan, but his comments were measured and did not prompt a major market reaction. Rates in Japan and the US rose after US President Donald Trump and Chinese President Xi Jinping concluded their summit in Beijing on 15 May, amid higher crude oil prices and renewed inflation concerns. The dollar strengthened across the board. The USD/JPY had risen to around 158.50, its highest level since 30 April, at the time of writing on 15 May (Figure 1). The dollar strengthened across the board against G10 currencies this week. Commodity currencies performed strongly as crude oil prices rose, while the sterling was relatively weak amid political instability (Figure 2).

FIGURE 1: USD/JPY

Note: As at 13:00 JST on 15 May
Source: EBS, Refinitiv, MUFG

FIGURE 2: MAJOR CURRENCIES' RATE OF CHANGE VS USD THIS WEEK

Note: As at 13:00 JST on 15 May
Source: Bloomberg, MUFG