JPY TO USD Rising

The yen has risen against the US dollar

Since the second half of 2024, the yen has fallen sharply against the US dollar, mainly due to multiple factors such as Japan’s economic challenges and the wide interest rate gap between the United States and Japan. However, after entering 2025, with positive signs in the Japanese economy and the market’s expectations that the Federal Reserve will slow down its pace of interest rate cuts, the yen has rebounded. In particular, on February 13, the yen rose significantly against the US dollar in the global foreign exchange market. As of the close of the day, the dollar-yen exchange rate fell by 1.0491%, hovering around the high of 1 dollar to 152 yen.

There are many factors behind the significant rise in the yen against the US dollar this time. On the one hand, the market has recently had different expectations for the future monetary policy direction of the Federal Reserve, which has affected the trend of the US dollar to a certain extent, and non-US currencies have generally risen. The yen led the gains, mainly due to the good performance of some economic data released by Japan recently. The latest labor statistics survey report released by the Ministry of Health, Labor and Welfare of Japan shows that in December 2024, real wages excluding the impact of price changes have shown positive growth for two consecutive months, which reflects the positive changes in Japan’s domestic labor market. Residents’ consumption capacity is expected to increase, which will drive economic growth and provide support for the yen. In addition, the national consumer price index released by the Ministry of Internal Affairs and Communications of Japan in late January showed that in December 2024, prices excluding fresh food rose by 3.0% year-on-year, hitting a new high since August 2023. The market’s expectations for further interest rate hikes by the Bank of Japan have continued to increase, which has also driven the appreciation of the yen. UBS analysts pointed out in a research report that the yen has performed strongly this year, and the underlying factor is the rising expectations of Japan’s interest rate hikes.

In addition, some institutions believe that the yen, as one of the safe-haven currencies, has risen more significantly, especially when global economic uncertainty increases. Morgan Stanley analysts pointed out in a report released last week that with the gradual advancement of tariff policies, the uncertainty of the global economic landscape has increased significantly, and the yen, as one of the traditional safe-haven currencies, has provided strong support for its price increases. Analysts at Morgan Stanley believe that looking ahead, the yen still has more room to rise.