The Yen is on Track for its Biggest Weekly Gain in 15 Months
Against the euro, the yen is up 2.3% for the week, its best result in a year. It has also gained around 2.7% versus the British pound.
Quick overview
- The Japanese yen experienced its largest weekly gain in over a year, driven by investor confidence following Prime Minister Sanae Takaichi's electoral victory.
- The U.S. dollar weakened globally, facing a 0.7% weekly loss against a basket of currencies amid mixed employment data.
- The yen rose 2.3% against the euro and 2.7% versus the British pound, while the euro is on track for its fourth consecutive daily decline.
- Markets are anticipating U.S. inflation data, which could influence future interest rate expectations.
The Japanese yen dominated currency markets this week, as the U.S. dollar weakened globally amid mixed U.S. employment data and growing anticipation ahead of the upcoming inflation report.
The yen is on track this Friday to post its largest weekly gain in more than a year, after the historic electoral victory of Japanese Prime Minister Sanae Takaichi eased some investor concerns about public finances. Meanwhile, the euro is approaching its fourth consecutive daily decline.
Japan’s currency led activity in the foreign exchange market throughout the week, particularly as its rally disrupted initial expectations that a sharp selloff in the yen could accelerate if Takaichi secured a strong mandate in last Sunday’s election.
Instead, the yen recovered most of the losses it had suffered ahead of the vote. Volatility in equity markets this week also funneled capital into lower-yielding currencies perceived as safe havens, such as the yen and the Swiss franc.
On Friday, the dollar rose 0.5% against the Japanese currency to 153.46 yen, but the yen is still on track for a weekly gain of 2.7%, its strongest performance since November 2024.
Against the euro, the yen is up 2.3% for the week, its best result in a year. It has also gained around 2.7% versus the British pound.
Across the broader market, most currencies were trading within narrow ranges ahead of the release of U.S. inflation data later in the day, which could shape expectations for the future path of U.S. interest rates. Markets are currently pricing in two rate cuts in 2026, with the first likely in July.
How major global currencies are performing at the end of the week
The dollar is heading for a weekly loss of 0.7% against a basket of currencies, pressured by doubts over the underlying strength of the U.S. economy following a series of labor market readings that, while appearing solid on the surface, revealed signs of weakness in hiring.
The Australian dollar — the best-performing currency of 2026 so far, after surging in recent weeks due to the hawkish stance of the Reserve Bank of Australia — fell 0.3% to $0.7073, but remains on track for a weekly gain of around 0.9%.
The Swiss franc, another strong performer this week with a 0.8% gain, was trading flat at 0.7695 francs.
The euro edged down slightly to $1.1863, while the British pound slipped 0.1% to $1.3613.
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