The Japanese Yen continues to draw support from the BoJ's hawkish interest rate hike on Friday. The divergent BoJ-Fed outlook and narrowing US-Japan yield differential favor the JPY bulls. Fed rate cut bets could act as a headwind for the buck and further cap gains for the USD/JPY pair.

The Japanese yen and the Swiss franc gained while the U.S. dollar fell against major currencies on Monday amid a selloff in technology stocks as markets weighed the implications of a Chinese startup launching a free open-source artificial intelligence model.

The Japanese yen and the Swiss franc gained against major currencies on Monday amid a selloff in technology stocks as markets weighed the implications of a Chinese startup launching a free open-source artificial intelligence model.

Traders look to Trump’s speech for a fresh impetus ahead of the BoJ decision on Friday.

The benchmark S&P 500 was down 1.6 per cent to 6,003.04, dragged down by technology stocks. AI chipmaker Nvidia was down nearly 14 per cent to $123.02

The gap could widen even further, and exacerbate pressure on the yen, if the Federal Reserve’s preferred ... and a lot of very public pushback from Japanese officials,” said Joe Capurso ...

The U.S. dollar weakened against the yen on Thursday, as softer-than-expected U.S. economic data and growing confidence for a Bank of Japan interest-rate hike sent it tumbling to a near one-month low against the Japanese currency.

The Bank of Japan hiked interest rates on Friday to their highest level in 17 years and signalled more were in the pipeline despite fears of turmoil under US President Donald Trump.

The Bank of Japan raised its key interest rate to about 0.5% from 0.25% Friday, noting that inflation is holding at a desirable target level.

Looking back, yen-funded carry trades have turned out to be among the most profitable plays this year. Of 20 major emerging markets currencies, all generated positive total returns, led by the Turkish lira’s 19% and Mexican peso’s 14%.

Japanese markets eked out modest gains despite the yen's rise amid speculation of a BoJ rate hike next week. The Nikkei average edged up by 0.33 percent to 38,572.60 while the broader Topix index settled marginally lower at 2,688.31.

The Yen and Swiss Franc were stronger against the dollar as investors sought safe havens after Chinese start-up DeepSeek’s new AI model hit U.S. tech stocks.