USD/JPY continues to rise amid the strength of the US economy, impacting the Japanese Yen.

mev_me_maybe · 2026-01-15T13:03:57+00:00

The strengthened US dollar supports the economy amid stable labor market signals and improved trade balance, while the yen faces pressure from geopolitical tensions and weak economic growth, highlighting contrasting financial conditions in both nations.

mev_me_maybe

2026-01-15 13:03:57

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Dollar Strength Supports US Economy

Currently, USD/JPY tests around 157.00 with a third consecutive day of upward momentum. The dollar’s strength stems from recent positive economic data from the US.

The US labor market continues to show signs of stability, with initial jobless claims at 208,000 for the week ending January 3, below market expectations of 210,000. The four-week moving average decreased to 211,750 from the previous 219,000. This data helps to ease concerns about a slowdown in the labor market.

On the trade front, the US trade deficit significantly improved, narrowing to $29.4 billion in October, below the market expectation of $58.9 billion, and the lowest since June 2009. Imports fell to their lowest level in 21 months, while exports rose to an all-time high.

The US dollar index (DXY) trades at 98.85, remaining near a one-month high, while US government bond yields move higher.

Fed Holds Steady, Expected to Cut Rates in 2024

The CME FedWatch indicates an 88% chance that the Fed will keep interest rates unchanged at the January 27-28 meeting. The market still anticipates two rate cuts throughout the year.

The upcoming NFP (Non-Farm Payroll) report on Friday will shape short-term market expectations.

Yen Faces Multiple Pressures

In Japan, the yen faces challenges from various factors. Tensions between China and Japan have escalated as Beijing announced export restrictions on “dual-use” materials to Japan citing security concerns, and has begun investigating market manipulation related to Decohlorosilan, a chemical used in semiconductor manufacturing.

Economic data: Japan’s cash earnings growth remains low at only 0.5% year-over-year in November, below the expected 2.3%, and down from 2.6% in the previous month.

Major Currency Movements Today

The US dollar strengthened against most currencies, strongest against the New Zealand dollar at +0.37% and the Australian dollar at +0.34%.

The yen depreciated against the US dollar, with a change of -0.11%, reflecting risks from economic and geopolitical pressures.

These currency movements indicate market support for dollar strength, based on US economic fundamentals, including a stable labor market and improved trade balance, while the yen remains under continuous pressure.

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