USD/JPY approaches its highest level in a year at 157.75 amid broad-based Yen softness

Japanese Yen Weakens Amid Geopolitical and Economic Uncertainty

On Friday, the Japanese Yen experienced widespread losses. Heightened tensions with China and uncertainty surrounding the Bank of Japan's (BoJ) next interest rate increase fueled a rally in the USD/JPY pair, which climbed over 0.5% to reach a 12-month peak at 157.75.

The US Dollar maintained its strength as market sentiment remained cautious. Investors are anxiously awaiting the US Supreme Court's verdict on the legality of trade tariffs imposed by President Donald Trump. Should the court rule against the tariffs, corporate legal teams are preparing to seek $150 billion in reimbursements.

Additionally, the upcoming US Nonfarm Payrolls report for December will be the first comprehensive employment update following the most prolonged US government shutdown on record. While job growth is anticipated to be modest and unemployment may edge lower, these figures are unlikely to provide clarity regarding the US Federal Reserve’s potential rate cut schedule.

Japanese Economic Indicators Show Improvement, Yet Yen Remains Under Pressure

Recent statistics from Japan indicated a surprising rebound in Household Spending for November, signaling a notable uptick in consumer activity. Furthermore, the Leading Economic Index reached its highest level in a year and a half. Despite these positive developments, the Japanese Yen continued to weaken.