Week in review

The USD/JPY opened the week at 159.78. The pair lacked direction and hovered around that level early in the week with many overseas participants away for the Easter holiday. It rose to a high of 160.03 on 7 April, but failed to establish itself above 160. US President Donald Trump then announced a two-week ceasefire with Iran early on 8 April in Tokyo trading, triggering broad dollar weakness and pulling the pair down to a low of 157.89 later in US trading. The pair then recovered gradually after the March FOMC minutes showed the committee had discussed the need to consider rate hikes. The USD/JPY subsequently moved back into the 159 range as a rise in cross-yen pairs weighed on the yen (Figure 1). The dollar weakened across the board among G10 currencies this week after the two-week ceasefire deal was announced. Risk aversion eased across financial markets as a whole, bringing back the pattern of dollar and yen selling seen before tensions in the Middle East escalated (Figure 2).

FIGURE 1: USD/JPY

Note: As at 14:00 JST on 9 April
Source: EBS, Refinitiv, MUFG

FIGURE 2: MAJOR CURRENCIES' RATE OF CHANGE VS USD THIS WEEK

Note: As at 14:00 JST on 9 April
Source: Bloomberg, MUFG