Dollar-Yen pair bounces off one-month low amid easing trade tensions

The Japanese yen has taken a hit after its surge during the Asian trading session, which happened at the same time as a big hike in the dollar. The decision by US President Donald Trump to postpone 50% import tariffs on the European Union (EU) has given investors a much-needed boost. Experts at FXStreet say this is making people less interested in safe-haven assets, like the yen.

Meanwhile, market participants are growing more confident that the Bank of Japan will raise interest rates again in 2025. Such a maneuver could help mitigate more substantial losses for the yen, as noted by analysts from the news site.

FXStreet forecasts suggest that the greenback might not be able to get back on its feet if the Federal Reserve's borrowing costs go down and the US financial climate gets worse.

Bank of Japan Governor Kazuo Ueda has already expressed his willingness to pursue more rate hikes. He emphasized the central bank needs to keep an eye on mounting food prices as they usually make core inflation go up.