US-EU Disputes Weaken Dollar, Push USD/JPY Close to 157.80
The USD/JPY currency pair has come under pressure, showing a decline of 0.2% as it approaches the 157.80 mark during the European trading session on Tuesday. The US Dollar is losing ground against multiple currencies due to ongoing tensions between the United States and the European Union over the sovereignty of Greenland.
Impact of US-EU Disputes on the Dollar
As of this time, the US Dollar Index (DXY), which measures the dollar against six major currencies, is down 0.56%, trading close to 98.45. This decline reflects increased selling pressure on the dollar, spurred by US President Donald Trump’s threats of tariffs on several EU countries and the United Kingdom. This strategy aims to persuade the EU to permit the US to buy Greenland, raising concerns over future US-EU relations.
Statements from US Officials
Despite these tensions, US Treasury Secretary Scott Bessent recently reiterated at the World Economic Forum (WEF) in Davos that the US intends to maintain its membership in NATO. Additionally, he indicated that an announcement regarding the successor to Federal Reserve Chair Jerome Powell could come as early as next week.
Japanese Yen Performance
While the Japanese Yen (JPY) has shown some strength against the US Dollar, it is lagging behind other global currencies. This scenario is partly due to Prime Minister Sanae Takaichi’s plans to implement looser fiscal policies. She has announced intentions to dissolve the lower house of Japan’s Parliament on January 23 and to suspend the consumption tax for the next two years.
Upcoming Bank of Japan Announcement
A critical factor influencing the Japanese Yen will be the monetary policy announcement from the Bank of Japan (BoJ) scheduled for Friday. Investors will closely monitor these developments as they could further impact currency movements.
- Current USD/JPY Rate: Close to 157.80
- US Dollar Index (DXY): Approximately 98.45, down 0.56%
- Prime Minister Takaichi’s Actions: Plans to dissolve parliament on January 23
- Tax Policy: Suspension of consumption tax for two years
