The USD/JPY currency pair settled below Friday’s high of 158.84, its strongest level since April 30th, amid broad-based strength in the US Dollar, supported by signs of improving trade dynamics between the United States and China as well as solid expectations that the Federal Reserve will keep interest rates on hold through the year.
US President Donald Trump said that he had struck “fantastic trade deals” with Chinese President Xi Jinping as he wrapped up his Beijing visit on Friday.
After the Trump-Xi meeting, a White House official also said: “The two sides discussed expanding market access for American businesses into China and increasing Chinese investment.”
In parallel, traders have largely priced out Fed interest rate cuts for 2026. This shift has been driven by intensifying inflation pressures tied to higher energy prices, which has reinforced the perception of a prolonged period of restrictive Federal Reserve monetary policy.
US producer prices rose at their sharpest rate in four years in April, data showed, while annual headline inflation, at 3.8% in April, has been the highest since May 2023.
The major Forex pair gained 1.21% for the week.
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