ISM Manufacturing PMI in US May Shows Weakness
- ISM manufacturing PMI in the US has fallen to a six-month low.
- USD/JPY continues to decline as demand for the safe-haven yen increases.
- The US dollar struggles against major currencies amid concerns over Trump’s tariffs.
- The Japanese yen benefits from its status as a safe haven, with USD/JPY trading below 143.00.
The Japanese yen strengthened against the US dollar on Monday, as investors flocked to its safe-haven status.
Concerns about President Donald Trump’s aggressive tariff policies have heightened market anxiety, with the USD/JPY pair dropping below 143.00.
Tariffs Impact the US Dollar
A significant factor behind the dollar’s current weakness is growing unease regarding President Trump’s trade approach. Recently, the US threatened to double tariffs on steel and aluminum from 25% to 50%. This has raised fears of an escalating trade war.
Such measures have made investors anxious about potential slower global economic growth, especially since increased import costs could lead to inflationary pressures.
In the US, the ISM Manufacturing Purchasing Manager Index (PMI) for May dropped to 48.5, well below the expected rise to 49.5, marking a six-month low.
Ongoing trade tensions with China and other key economies, along with Trump’s tariffs, may hinder US economic expansion. Rising tariffs could increase input costs for businesses, potentially resulting in smaller profit margins and reduced consumer spending.
In contrast, the yen has gained favor. Seen as a safe haven, during uncertain times, it tends to attract investors looking to secure their assets. This allure was particularly pronounced amid increasing concerns about US tariffs and global trade instability.
As the USD/JPY currency pair has approached a key support level, the yen remains highly regarded against the dollar. Japan’s stable economic and political climate, alongside its robust industrial base and low inflation, makes it an appealing choice during volatile periods.
Market participants are keenly observing any developments in US trade policy since new tariff announcements could further impact the USD/JPY pair. Upcoming meetings between President Trump and Germany’s new Prime Minister Friedrich Merz this week may contribute to the existing uncertainty and influence the dollar’s direction.
This Week’s Japanese Yen Price
Below is the weekly change in the Japanese yen (JPY) against various currencies, showcasing its strength against the US dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.70% | -0.47% | -0.67% | -0.17% | -0.79% | -1.05% | -0.68% | |
| EUR | 0.70% | 0.23% | 0.05% | 0.52% | -0.08% | -0.38% | 0.01% | |
| GBP | 0.47% | -0.23% | -0.15% | 0.29% | -0.31% | -0.61% | -0.22% | |
| JPY | 0.67% | -0.05% | 0.15% | 0.50% | -0.13% | -0.40% | -0.11% | |
| CAD | 0.17% | -0.52% | -0.29% | -0.50% | -0.61% | -0.89% | -0.51% | |
| AUD | 0.79% | 0.08% | 0.31% | 0.13% | 0.61% | -0.24% | 0.17% | |
| NZD | 1.05% | 0.38% | 0.61% | 0.40% | 0.89% | 0.24% | 0.39% | |
| CHF | 0.68% | -0.01% | 0.22% | 0.11% | 0.51% | -0.17% | -0.39% |
This table illustrates the weekly change in the Japanese yen against other major currencies. Each percentage reflects how the yen has moved in relation to the listed currencies, revealing its current strength.
