The USD/JPY pair has weakened to approximately 159.35 during the Asian trading session on Thursday. Trump stated that the ceasefire established on April 7 would remain in effect indefinitely. The BoJ is anticipated to keep its policy rate steady at 0.75% in the upcoming April meeting. The USD/JPY pair experiences a decline, hovering around 159.35 during the Asian trading session on Thursday. The extension of a ceasefire with Iran by US President Donald Trump exerts pressure on the US Dollar in relation to the Japanese Yen. The initial assessment of the S&P Global Purchasing Managers Index is set to be released later on Thursday.
On Tuesday, Trump announced the extension of the ceasefire with Iran as he awaits a “unified proposal” from Tehran. Iran has committed to keeping the Strait of Hormuz closed in light of the US naval blockade, even with the extension of the ceasefire. Previously, White House press secretary Karoline Leavitt stated that she does not consider Iran’s claim of seizing two ships in the Strait of Hormuz to be a breach of the ceasefire. In the meantime, Lebanon is set to advocate for a one-month extension of the existing truce with Israel during an upcoming series of discussions in Washington on Thursday. Discussions between Lebanon and Israel on April 14 marked their initial engagement in decades, with the US subsequently declaring a 10-day truce, which is scheduled to conclude on Sunday.
Bank of Japan Governor Kazuo Ueda refrained from indicating a rate hike in April, pointing to significant economic uncertainty stemming from the “negative supply shock” caused by the war. The prevailing sentiment in financial markets suggests that the Japanese central bank is expected to maintain its current interest rates until at least June 2026. Current market assessments indicate a probability range of approximately 72%-77% for a rate increase in May, with expectations for a hike reaching nearly 99% by June, as reported.