Does Japanese Yen Follow the Dollar in Global Currency Trends

The Japanese yen's relationship with the US dollar is a topic of much interest and debate. In recent years, the yen has often been seen as a safe-haven currency, similar to the dollar.

The dollar and yen have historically been inversely correlated, meaning when the dollar goes up, the yen goes down. This is due to the fact that the dollar is often seen as a riskier currency, while the yen is viewed as a more stable store of value.

However, the yen's movements are also influenced by its own economic indicators, such as Japan's trade balance and interest rates. A strong yen can actually hurt Japan's economy by making its exports less competitive.

The yen's correlation with the dollar is not absolute and can be affected by a variety of factors, including global economic trends and central bank policies.

Curious to learn more? Check out: Yen to Hk Dollar

The USD/JPY exchange rate has been on a rollercoaster ride lately, with significant fluctuations in recent days.

The pair dropped toward 157.00 in the Asian session on Friday due to a negative shift in risk sentiment.

Markets remain concerned about China's economic health and the upcoming policies by the Fed and the BoJ, which is affecting the USD/JPY exchange rate.

The USD/JPY pair bounced back from the intraday low of 156.43 in the North American session on Thursday.

The US Dollar Index (DXY) rose above 108.80 as United States (US) Initial Jobless Claims for the week ending December 27 came in lower-than-projected.

The USD/JPY pair extended a pullback from a multi-month high of 158.07 set on Thursday, due to the negative shift in risk sentiment.

The US Dollar (USD) posted a fresh two-year high, which contributed to the recovery of the USD/JPY pair.

Related reading: Taux De Change 100 Franc Suisse / Dollar

The Japanese yen has been making some sharp gains against the US dollar, with USD/JPY trading at 146.53, down 0.68% on the day.

Solid US data has been the main driver behind the yen's rise, with retail sales blowing past expectations with a sizzling 1% gain and US inflation being almost unchanged at 2.9%.

The US dollar has retreated against the major currencies, down 1.8% against the yen since Friday.

Investors have regained their risk appetite, boosting equity markets, but the US dollar has taken a hit.

The Federal Reserve is widely expected to deliver an initial rate cut at next month's meeting, with the odds now favoring a quarter-point cut over a 50-basis-point cut.

Minneapolis Fed President Neel Kashkari said a rate cut discussion at the September meeting was "appropriate" due to eased inflation and concern about the deteriorating US labor market.

The annual Jackson Hole Symposium starts later this week, and all eyes will be on Fed Chair Powell's speech on Friday.

For your interest: Japanese Yen against Dollar