The USD/JPY pair began the new week on a weaker note, trading below the 149.00 mark as bearish sentiment towards the US Dollar continues to prevail. The divergence in policy expectations between the Federal Reserve (Fed) and the Bank of Japan (BoJ) is a significant factor influencing the currency pair's movement. Meanwhile, the economic landscape is overshadowed by uncertainty regarding the impact of a potential global trade war.
The softer US Dollar has provided some support to precious metals, with Gold maintaining its strength, albeit below $3,000, during the Asian session on Monday. Dovish expectations from the Fed have kept the yieldless Gold price underpinned, appealing to investors seeking stability amid economic uncertainty.
China's activity data for January and February showed mostly positive results, bolstering market sentiment. The Chinese government's plan to boost consumption further adds to the positive outlook. In contrast, economic uncertainty surrounding a global trade war persists, contributing to market volatility and influencing currency movements.
The Australian Dollar (AUD) has seen an upside, aided by a weaker US Dollar and increased risk appetite. As a result, the AUD/USD pair held higher ground above 0.6300 in the Asian session on Monday. A positive risk tone could potentially undermine the Japanese Yen, limiting the losses of currency pairs like USD/JPY.