Week in review
The USD/JPY opened the week at 145.86, ticking higher after reports of progress in US–China cabinet-level talks over the weekend. On 12 May during European hours, the US announced a provisional reduction in some US–China tariffs, triggering a sharp two-yen rally that briefly pushed the pair back above 148. After extending gains into the upper 148 range, the pair stalled. On 14 May, the USD/JPY dropped more than one yen into the 145 range after reports surfaced regarding US–South Korea currency discussions. The pair briefly rebounded to around 147 but resumed a gradual decline as focus shifted to the upcoming Japan–US finance minister meeting and the possibility of pressure to address yen weakness. Weaker-than-expected US economic data also contributed to the decline. On 16 May, the pair temporarily fell below 145 and was trading below 145.50 at the time of writing (Figure 1). Performance among G10 currencies has been mixed so far this week. The dollar strengthened broadly in the early part of the week but later gave back gains heading into the second half (Figure 2).
FIGURE 1: USD/JPY
Note: Through 14:00 JST on 16 May
Source: EBS, Refinitiv, MUFG
FIGURE 2: MAJOR CURRENCIES' RATE OF CHANGE VS USD THIS WEEK
Note: Through 14:00 JST on 16 May
Source: Bloomberg, MUFG
