Fundamental Overview
The USD is once again stronger across the board following President Trump’s implementation of tariffs on Canada, Mexico, and China on Saturday, as he followed through on his earlier threats. This move has caused significant gaps in other markets, particularly the stock market, due to the negative macroeconomic impact of trade wars.
Despite this, there’s still some optimism in the markets that the tariffs could be lifted quickly, with expectations that the involved countries will reach a deal. Today, attention will be on Trump’s discussions with Canada and Mexico, which are expected to take place in the first half of the U.S. session.
As for the JPY, there has been little movement since the Bank of Japan’s recent policy decision, where it raised interest rates by 25 bps as expected but did not provide much guidance for the future.
The latest Tokyo CPI came in as forecasted, slightly higher than the previous reading. This week, Japan will release wage growth data, though the yen remains more influenced by U.S. Treasury yields and fluctuations in risk sentiment.
