Summary
The dollar remained weak against G10 currencies through February amid growing concerns over the US and global economic outlook one month into the second Trump administration. The yen was bought as a safe-haven currency as Japan managed to avoid becoming a direct target of US tariff policies after successfully navigating the US-Japan summit meeting. The USD/JPY fell below 150 as the BOJ's continued hawkish stance fueled expectations for additional rate hikes. However, the move may have been excessive in the short term given yen strength was driven in part by monetary policy expectations. We expect the USD/JPY to rebound as expectations for additional BOJ rate hikes calm.
