Forex News
The headline Tokyo Consumer Price Index (CPI) for April climbed 3.5% YoY as compared to 2.9% in the previous month, the Statistics Bureau of Japan showed on Friday. Meanwhile, the Tokyo CPI ex Fresh Food, Energy came in at 2.0% in April vs. 1.1% in March.
Additionally, Tokyo CPI ex Fresh Food rose 3.4% YoY in April against 3.2% expected and up from 2.4% in the prior month.
Market reaction to the Tokyo Consumer Price Index
As of writing, the USD/JPY pair was up 0.15% on the day at 142.83.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Federal Reserve Bank of Minneapolis President Neel Kashkari said late Thursday that he is worried that with the uncertainty, businesses will do layoffs.
Key quotes
Resolution of trade frictions would relieve uncertainty, would be optimistic.
Does not see an increase in job cuts yet.
Worried uncertainty may cause layoffs.
Some businesses indicate they are preparing for possible job cuts if uncertainty continues.
Washington announcements pose a challenge for policymakers, and everyone.
Absolutely sure we will get through this.
Market reaction
The US Dollar Index (DXY) is trading 0.02% higher on the day at 99.30, as of writing.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- Silver steady on Thursday, supported by weaker US Dollar and lower bond yields.
- Traders eye upside amid lingering uncertainty over full US-China tariff rollback.
- Fed officials remain cautious, signal data-dependent path amid rising economic ambiguity.
Silver finished Thursday's session virtually unchanged, yet it remains near weekly highs of $33.65, with traders poised to push the grey metal higher.
XAG/USD clings to $33.65 as Fed uncertainty and falling Treasury yields bolster precious metals despite tariff relief hopes
An improvement in risk appetite was sponsored by a de-escalation of US President Donald Trump's tariffs on China, which weighed on silver prices. However, China’s Commerce Ministry Spokesman urged the US to lift all duties on Chinese imports “if it really wants to solve the problem.”
Precious metals remain underpinned by the fall of US Treasury yields. This consequently weakened the Greenback, which, according to the US Dollar Index (DXY), dropped 0.50% down to 99.28.
US economic data showed the labor market remains solid following the release of the latest Initial Jobless Claims figures, which came in aligned with estimates. US Durable Goods Orders smashed forecasts of 2% in March and grew 9.2% Month over Month due to a jump in transportation orders.
A myriad of Fed speakers led by Governor Waller grabbed the headlines. Waller said that it is unlikely to know the impact of tariffs in July, adding that the second half of 2025 will bring more clarity. Cleveland Fed Beth Hammack said that uncertainty is weighing on businesses, and if data warrants it, the Fed’s next move could be in June.
XAG/USD Price Forecast: Technical outlook
Amid this backdrop, Silver could remain trading near the week’s high but buyers need to clear key resistance levels. the first ceiling would be $34.00, followed by the current year-to-date (YTD) high of $34.58. Once those two levels are taken out, traders could target the $35.00 mark.
Conversely, if XAG/USD falls below $33.00, sellers will be tempted to test the 50-day Simple Moving Average (SMA) at $32.63. Once cleared, the next support would be $32.00.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Bank of Japan Governor Kazuo Ueda said on Thursday that the Japanese central bank will continue to raise interest rates if underlying inflation converges toward its 2% inflation target as projected.
However, Ueda stated that the central bank will scrutinise "without pre-conception" whether its forecasts will materialise, while looking at various data that become available, per Reuters.
Key quotes
Uncertainty regarding the global economy heightening.
Must scrutinize impact on business confidence.
We will scrutinize without pre-conception whether our forecast will materialize looking at various data that will become available.
We will look at various data, particularly those related to how tariffs affect the economy.
Wants to focus on sustainably, stably achieving BOJ's 2% inflation target.
Market reaction
At the time of writing, USD/JPY is trading 0.11% higher on the day to trade at 142.77.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
- EURJPY trades near the 162.00 zone, stabilizing ahead of the Asian session.
- Mixed signals dominate, with short-term momentum soft and broader trend still supportive.
- Resistance lies near 162.30 and 162.50; support seen around 161.70 and 161.20.
The EURJPY pair was seen trading near the 162.00 area on Thursday, holding steady ahead of the Asian session after a mildly choppy European trading day. The pair remains confined within a relatively narrow daily range, suggesting investors are awaiting a fresh catalyst before pushing in either direction.
From a technical perspective, the setup remains mixed. The Relative Strength Index is sitting in neutral territory, while the MACD prints a weak sell signal. The Stochastic RSI and Average Directional Index also remain muted, reflecting limited short-term momentum and trend strength.
However, longer-term moving averages continue to support the bullish structure. The 100-day and 200-day SMAs are still pointing upward, although the 20-day SMA is beginning to flatten, hinting at potential consolidation. The Ichimoku Base Line sits just under current price levels, offering a tentative support zone.
Immediate support is seen at 161.70, followed by 161.20. On the upside, resistance levels are found at 162.30, 162.50, and then 162.85.
Overall, while EURJPY is trading close to the upper end of its recent range, the pair needs a decisive push backed by momentum to validate further upside. Until then, traders may continue to see range-bound action.
- Gold snaps two-day losing streak, gaining 1.5% on fresh trade war fears.
- Trump softens tariff talk, but China denies negotiations and demands full rollback.
- Fed rate cut bets rise as yields drop and economic uncertainty builds.
Gold price snapped two days of losses on Thursday and rose $50, or more than 1.50%, amid renewed concerns about the US-China trade war. Even though US President Donald Trump softened his stance on sticking to 145% tariffs on Beijing, the XAU/USD trades at $3,338 after jumping off daily lows of $3,287.
Market mood remains upbeat with Wall Street posting gains. Although traders seem relieved by Trump’s willingness to reach a deal with Beijing, China plays hardball and asks to cancel all “unilateral” US tariffs, clarifying that they have not held talks with the US government.
Bullion prices advance underpinned by the plunge in US Treasury bond yields. The US Dollar Index (DXY) is also feeling the pain after hitting four-day peaks against a basket of six currencies.
US economic data witnessed the release of Initial Jobless Claims for the last week, which was aligned with estimates. Durable Goods Orders jumped sharply in March, sponsored by airplane orders.
Meanwhile, a wave of Federal Reserve (Fed) officials grabbed the headlines. Cleveland Fed President Beth Hammack stated the Fed could act as soon as June if the data supports it but emphasized that uncertainty is weighing on business planning.
Fed Governor Christopher Waller echoed a similar tone, noting that while action in June remains on the table, rate cuts may be driven by a weakening labor market. Waller said, “rate cuts could come from rising unemployment.”
Regarding the chances of the Fed reducing interest rates at the upcoming meeting, traders see a 94% chance of keeping them unchanged, according to Prime Market Terminal. Nevertheless, traders expect the Fed funds rate to end at 3.45%, equal to 86 basis points of easing (bps).
Source: Prime Market Terminal
Daily digest market movers: Gold price climbs boosted by weak US Dollar
- The yield on the US 10-year Treasury note has decreased by seven-and-a-half basis points, reaching 4.31%.
- US real yields collapsed seven bps to 2.023%, as shown by the US 10-year Treasury Inflation-Protected Securities yields.
- US Durable Goods Orders soared in March from 0.9% to 9.2%, sponsored by aircraft bookings. Initial Jobless Claims for the week ending April 19 rose by 222K as expected, up from 216K in the previous reading.
XAU/USD technical outlook: Gold price uptrend resumes as buyers reclaim $3,300
The Gold price uptrend resumed, yet buyers must clear the April 22 high of $3,386 to prevent sellers from dragging lower prices. The next key resistance level would be $3,400, followed by the $3,450 and the $3,500 figure.
On the other hand, if XAU/USD tumbles below $3,300, this could open the door to test $3,200 ahead of the April 3 peak of $3,167. A breach of the latter will expose the 50-day Simple Moving Average (SMA) at $3,041.
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
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