Japanese Yen exchange rate today May 13, 2025: Continues to weaken strongly

The sharp policy divergence between the US Federal Reserve (Fed) and the Bank of Japan (BoJ) is the main cause of pressure on the Yen.

In the international market, the USD/JPY exchange rate increased by nearly 2% during the day, approaching the threshold of 148. This breakthrough came after the progress in the US-China trade negotiations, when the two countries agreed to temporarily reduce tariffs for 90 days. This increased the risk appetite globally, causing investors to withdraw from safe assets such as Yen in search of higher yields.

At the same time, the yield on 10-year US bonds rose to 4.45%, and the Dollar Index (DXY) rose 1.25%, reaching a one-month high of 101.74 points, further putting pressure on the Yen to depreciate.

Despite Japan reporting a current account surplus of 2.723 trillion yen in March, beating forecasts, domestic sentiment remained cautious. Japanese capital continued to withdraw from overseas bond markets, while the BoJ’s March meeting minutes showed a cautious monetary stance amid concerns about the impact of US tariffs on exports.

In terms of outlook, in the short term, the USD/JPY exchange rate is forecast to continue its upward trend, as the Fed maintains a hawkish stance while the BoJ maintains its easing policy.

However, some domestic factors in Japan may be able to restrain the yen’s decline. Household spending is recovering, and if inflation continues to rise, the BoJ may be forced to adjust interest rates.

This week, important economic data such as the US inflation report, Fed Chairman Jerome Powell's speech, and Japan's first quarter GDP will be key factors affecting the USD/JPY exchange rate. Investors are advised to closely monitor to have a suitable trading strategy.