- The Japanese Yen (JPY) falls for a second day
- Japan wholesale inflation cools to 4% YoY
- The US Dollar (USD) is rising against its major peers
- USD had a volatile start to the week
The US dollar against the Japanese yen (USD/JPY) exchange rate is falling for a second straight session. The pair fell 0.63% in the previous session, settling on Tuesday at 147.52. At 20:00 UTC, USD/JPY trades 0.54% lower at 146.72 and trades in a range of 145.62 to 147.67.
The Japanese yen is rising for a second straight day against the US dollar after Japanese wholesale inflation cooled in April. Japan’s producer price index year on year was down 4% in April from 4.3% in March, marking the slowest rate in 2025. On a monthly basis, producer prices are down by 0.2% from 0.4%, driven by declines in iron steel and chemical costs.
Data points to a potential shift in the inflationary landscape in Japan, with iron and steel producer prices down 4.2% and chemical costs falling 1.5%. However, the declines were not across the board.
PPI can be considered a lead indicator for CPI and provides insight into upcoming shifts in consumer inflation. The Bank of Japan has maintained its cautious stance, aiming for a 2% CPI core inflation target, although recent numbers see this closer to 3% annually.
The US Dollar is falling against the yen but rising versus its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is 0.04% higher at 101.05 at the time of writing, after rising 0.31% last week.
The USD has risen from session lows and has moved into positive territory after a volatile start to the week.
The US dollar jumped over 1% on Monday on news of the de-escalation in the US-China trade war. The price then dropped sharply yesterday following cooler-than-expected inflation data, which helped ease fears surrounding the inflationary impact of trade tariffs on the US economy.
Looking ahead, tomorrow sees the release of US retail sales data, which will provide clues about the health of the US consumer. Federal Reserve Chair Jerome Powell will speak tomorrow after the Fed left interest rates unchanged in the meeting last week.
