JPY Sold on Hike Apprehension

Key takeaways

Tariff uncertainty eases as markets calm

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Yesterday's currency recap

USD traded broadly lower yesterday as markets continued to digest the fallout from the Supreme Court decision striking down Trump’s global tariff regime, injecting fresh uncertainty into US trade policy and weighing on USD sentiment. Overall, tariff-related headline risk and recalibration of US policy expectations were the dominant drivers, with markets now looking ahead to upcoming US data and central bank commentary for clearer directional cues.

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Today's GBP rates

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*Daily move - against G10 rates as of 17:00 GMT, 23.02.26 

** Indicative rates - interbank rates as of 17:00 GMT, 23.02.26

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Key data points

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Today's speeches

• GBP: BoE Bailey, Green, Taylor
• USD: Fed Bostic, Collins, Waller

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What we think

JPY has weakened this morning after reports that Prime Minister Sanae Takaichi expressed concern about additional rate hikes during a meeting with Bank of Japan Governor Kazuo Ueda. According to local media, Takaichi adopted a tougher stance than at their prior meeting, surprising markets that had expected a shift toward more market-friendly policies. The comments have increased concerns about political pressure potentially constraining further Bank of Japan tightening, raising the risk that rate hikes could be suppressed.

Quiet day ahead on the data front with just US consumer confidence out as well as several Fed speakers on the agenda. Last weeks fundamental data did prop up demand for USD. Demand for USD has picked up a bit this morning following the sale of JPY and we look to see if Fed commentary and consumer confidence will further add to gains.

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