The USD/JPY currency pair settled above Friday’s low of 142.048, its weakest level since September 30th 2024, as escalating trade tensions and rising concerns over a wider economic fallout for the US have shaken confidence in US assets, triggering bond market sell-off and supporting traditional safe haven currencies such as the Japanese Yen.
The US Dollar losses across the board came after the latest developments on the tariff front. China’s finance ministry said on Friday that it would raise tariffs on US imports to 125% from April 12th, from the previously announced 84%.
The decision was a direct response to the Trump administration’s cumulative tariff rate of 145% on Chinese imports.
The fluctuating stance on tariffs emanating from Washington has seemingly eroded confidence in the US Dollar as a reliable store of value in times of stress and led to fund flows into other markets.
The yield on benchmark US 10-Year Treasuries settled above 4.49%, having reached 4.592% on Friday, or the highest since February 13th. The 10-year bond yield went up 49.7 basis points this week to mark the sharpest weekly increase since 2001.
The latest macro data only added to the bleak outlook. The University of Michigan’s consumer sentiment index plummeted to its lowest level since 2022 in April, while 1-year inflation expectations rose to levels last seen in 1981.
The USD/JPY currency pair settled 0.68% lower at 143.437 on Friday.
The major Forex pair lost 2.36% for the week, or its worst performance since early February.
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