The Japanese yen rose in Asian trade on Friday against a basket of major rivals, expanding gains for the fourth straight session against the US dollar and hitting a week high ahead of a new round of trade talks between Japan and the US next week.

The yen is also bolstered by a drop in US 10-year treasury yields after negative surprises from recent US data, which boosted the odds of Fed rate cuts this year.

The Price

The USD/JPY fell 0.5% today to 144.96, a week low, with a session-high at 145.68.

The yen rose 0.75% on Thursday against the dollar, marking the third profit in a row on haven demand following weak US data.

Trade Talks

Sources indicate that chief Japanese trade negotiator, Ryusi Akazo, could travel to Washington early next week for a third round of trade talks with the US.

Japans finance minister Katsunubo Kato said on Friday hell discuss forex exchange issues with US Treasury Secretary Scott Bessent soon, with an aim at containing extreme currency fluctuations.

Kato said the Japanese government remains committed to its investments in US treasury notes as a high-liquidity reliable asset.

Economic Recession

Earlier data showed the Japanese economy contracted for the first time in a year in the quarter ending March, indicating the fragility of the Japanese economy.

Japans GDP shrank 0.2% in the first quarter, missing estimates of a 0.1% dip, and after a 0.7% growth rate in the fourth quarter of 2024.

US Yields

US 10-year treasury yields fell over 0.4% on Friday away from recent five-week highs at 4.548%, pressuring the dollar.

Recent weak inflation data bolstered the odds of two 0.25% Fed rate cuts in the second half of the year.

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