The Japanese yen rose in Asian trade on Friday against a basket of major rivals, while trying to recoup from four-week lows against the dollar on short-covering.

Despite the gains, the yen is still heading for the third weekly loss in a row as the odds of a BOJ interest rate hike in June receded, while global risk appetite improved alongside developments in trade talks with the US.

The Price

The USD/JPY price fell 0.3% today to 145.46, with an April 10 high at 146.18.

Weekly Trades

Across the week, the yen is down 0.5% so far on the dollar, on track for the third weekly loss in a row.

Japanese Rates

The Bank of Japan expects inflation to hit 2% by the second half of 2026, nearly a year after its previous estimates in January.

BOJ Governor Kazuo Ueda said the timing for achieving the 2% inflation target will be delayed somewhat.

Thus the odds of a BOJ 0.25% interest rate cut in June stood below 25%.

Trade Developments

The US and the UK announced a new trade agreement, the first of its kind with the new US administration.

According to the deal, the 10% base reciprocal tariffs on UK goods will continue, but 25% tariffs on British cars will be reduced to 10%, while 25% tariffs on UK steel and aluminum will be scrapped.

The UK will reduce tariffs on a range of US goods from 51% to 1.8%, while raising beef and ethanol imports from the US by $5 billion a year.

Following the announcement of the deal with the UK, Trump said he expects negotiations with China by the end of this week, which could lead to a reduction in the 145% China tariffs.

US Treasury Secretary Scott Bessent is scheduled to meet Chinese trade officials on Sunday in Switzerland to conduct negotiations.

The US administration might reduce tariffs on Chinese imports by over a half according to the New York Posts sources.

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