The yen rose on Friday after the Bank of Japan hiked interest rates and revised up its inflation forecasts, while the dollar touched a one-month low due to President Donald Trump’s comments on a potentially softer stance on tariffs against China.
The BOJ raised interest rates by 25 basis points, a move that was widely anticipated, and the yen rose to 154.845 per dollar following the decision. However, it pared some of its gains after Governor Kazuo Ueda’s press conference, where he stated that a rise in underlying inflation was moderate and the central bank was not “seriously behind the curve,” suggesting no rush to tighten policy again.
The dollar was also affected by Trump’s comments, which suggested a potentially softer approach to tariffs on China. The dollar fell to a one-month low against a basket of currencies, with the euro rising 0.7% to $1.0488 and the pound advancing 0.4% to $1.2402.
Other currencies, such as the Australian and New Zealand dollars, also received a boost, with the Australian dollar jumping 0.6% to reach a five-week high and the New Zealand dollar scaling a five-week peak.
The Chinese yuan also rose on the news, with the onshore unit reaching its strongest level in eight weeks. The currency had been under pressure in recent weeks due to trade tensions and concerns over the impact on the economy.
The dollar’s weakness has been a trend in recent weeks, with investors selling the currency in the wake of Trump’s inauguration and his announcement of tariffs against several countries. The greenback extended its losses to hit a one-month low against a basket of currencies, with many analysts expecting it to continue falling.
The euro, pound, and other currencies are likely to benefit from the dollar’s weakness, with the euro rising 0.7% to $1.0488 and the pound advancing 0.4% to $1.2402. The Australian and New Zealand dollars are also poised to continue their upward trend, with the Australian dollar jumping 0.6% to reach a five-week high.
In cryptocurrency news, bitcoin rose 2.27% to $10,549, while Trump ordered the creation of a cryptocurrency working group, which will propose new digital asset regulations and explore the creation of a national cryptocurrency stockpile.