JPY: Strong position – ING

The Japanese Yen (JPY) is the biggest winner in this latest round of USD selling, as it responds to both the equity slump and the risks of the Fed’s independence. USD/JPY has dropped below the 140.0 mark and given the broad attractiveness of the yen as a safe-haven substitute, we don’t see the conditions for an immediate reversal of the move, ING's FX analyst Francesco Pesole notes

USD/JPY can aim at the 135.0 mark

"If anything, the yen stands to benefit a bit more than the euro from USD outflows, thanks to a stronger domestic picture. Even if it’s been reported that the Bank of Japan should keep rates on hold on 1 May and cut inflation forecasts on a stronger yen, data should still argue for the gradual tightening guidance to remain in place."

"Tokyo CPI figures for April are expected to show a major jump on Friday. Incidentally, it’s been reported that Japan’s ruling party is planning an emergency proposal of domestic support to counter the tariff impact."

"Finally – and quite importantly – Japan has moved earlier than most other countries in negotiating with the US on a trade deal. Finance Minister Katsunobu Kato will meet with Scott Bessent this week and said currencies will be a key aspect of the discussion. If the Trump administration includes JPY strengthening as a condition for a trade deal, we could easily see USD/JPY aim at the 135.0 mark."