Created
: 2025.05.12
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
USD/JPY rallies above 148.00 as USD soars on US-China trade truce
World FX news
Breaking news
USD/JPY rallies above 148.00 as USD soars on US-China trade truce
New
2025.05.12 19:31
2025.05.12 19:31
2025.05.12 19:31
- USD/JPY surges above 148.20 as the 90-day pause in US-China tariffs has strengthened the US Dollar.
- The US and China have lowered tariffs by 115%, but the 20% fentanyl levy on Beijing is still intact.
- The US-China trade truce has diminished the safe-haven demand for the Japanese yen.
The USD/JPY pair soars above 148.20 during European trading hours on Monday, the highest level seen in a month. The asset strengthens as the United States (US) and China have agreed to a 90-day truce after a two-day meeting in Switzerland over the weekend.
In a joint statement, the US and China have announced that they have lowered tariffs by 115%. The Washington reported that import duties on Beijing still have the 20% fentanyl levy, but have assured that there have been "constructive discussions" to resolve the same.
Signs of an averted Sino-US trade war have strengthened the US Dollar (USD). The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, surges to near 101.80, the highest level seen in a month.
In April, investors liquidated positions in the US Dollar and US assets heavily after President Donald Trump imposed reciprocal tariffs.
The next trigger for the US Dollar is the US Consumer Price Index (CPI) data for April, which will be published on Tuesday. The impact of the inflation data is expected to be limited, unless it diverges significantly from the consensus, as the Federal Reserve (Fed) is more focused on consumer inflation expectations, which have elevated due to the announcement of new economic policies by US President Trump. However, increased confidence in the US-China trade truce is expected to diminish inflation projections.
Meanwhile, the Japanese Yen (JPY) underperforms across the board as positive outcomes from US-China trade talks have diminished its safe-haven demand significantly. In the domestic region, investors seek fresh cues on when the Bank of Japan (BoJ) will raise interest rates this year.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the 'de facto' currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world's reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed's 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed's weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Last updated
: 2025.05.12
Related articles
President Trump: We achieved total reset with China
23 minutes agoAUD/USD turns upside down to near 0.6400 after US-China trade truce
28 minutes agoEUR tumbles 1.5% on the day - Scotiabank
2025.05.12 21:52CAD is down 'only' 0.3% vs. USD and a relative outperformer - Scotiabank
2025.05.12 21:47USD surges on US/China détente as markets reprice Fed cuts - Scotiabank
2025.05.12 21:45USD/JPY surges on US-China tariff Truce, hits 144+ - Rabobank
2025.05.12 21:40
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
Trade thaw undermines ley Gold drivers - TDS
Developments on trade over the weekend were as close to an about-face as one could have hoped for, TDS' Senior Commodity Strategist Daniel Ghali notes.
New
2025.05.12 23:14President Trump: We achieved total reset with China
President Donald Trump said on Monday that he may speak with Chinese President Xi Jinping later this week, as negotiations between the two economic powers show signs of progress toward a potential trade agreement.
New
2025.05.12 23:04AUD/USD turns upside down to near 0.6400 after US-China trade truce
The AUD/USD pair gives back initial gains and turns negative during North American trading hours on Monday.
New
2025.05.12 22:59EUR tumbles 1.5% on the day - Scotiabank
The Euro (EUR) is weak, down 1.5% vs. the US Dollar (USD) and seeing its largest one day decline since early November, around the time of the US election, Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
2025.05.12 21:52CAD is down 'only' 0.3% vs. USD and a relative outperformer - Scotiabank
The Canadian Dollar (CAD) is weak, down 0.3% vs. the US Dollar (USD) but a relative outperformer against all of the G10 currencies with the CAD's peer currencies showing much greater declines in response to the US/China trade détente, Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
2025.05.12 21:47USD surges on US/China détente as markets reprice Fed cuts - Scotiabank
The US Dollar (USD) is up broadly with meaningful gains against all of the G10 currencies as markets respond to the de-escalation in trade tensions between the US and China.
New
2025.05.12 21:45USD/JPY surges on US-China tariff Truce, hits 144+ - Rabobank
News that the US and China have reached an agreement that substantially lowers trade tariffs between them for 90 days has sparked a wave of optimism that has supported risky assets and weighed on safe havens.
New
2025.05.12 21:40Gold drops as US-China tariff reduction weighs on safe-haven demand
Gold prices are under significant pressure in Monday's session, weighed down by improving global risk sentiment and a strengthening US Dollar (USD).
New
2025.05.12 21:16Mexican Peso weakens as US-China trade deal lifts US Dollar demand
The Mexican Peso (MXN) is trading lower against the US Dollar (USD) during Monday's European session, weighed down by rising demand for the Greenback following a breakthrough in US-China trade talks and ongoing Banco de Mexico (Banxico) policy easing.
New
2025.05.12 20:59GBP: The strongest story in G10? - ING
This will be a busy week in the UK data calendar, ING's commodity experts Ewa Manthey and Warren Patterson note.
New
2025.05.12 20:56Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
