The Japanese yen rose on Thursday as investors assessed the latest signals from the Bank of Japan regarding the interest-rate path, while also monitoring Nvidia’s earnings for clues about demand for artificial intelligence technologies.

The yen gained 0.2% against the US dollar to 155.99, on track to break a two-day losing streak after Governor Kazuo Ueda kept the possibility of near-term rate hikes on the table.

Mixed Signals from Tokyo

In an interview with the Yomiuri newspaper, Ueda said the central bank will evaluate incoming data at its March and April meetings to determine the direction of monetary policy. His remarks came days after reports suggested Prime Minister Sanae Takaichi had voiced concerns about further monetary tightening during a meeting with the governor.

David Chao, global market strategist for Asia-Pacific at Invesco, said the Bank of Japan is “walking a tightrope,” but he still expects two rate hikes this year, forecasting the yen to be among the top-performing currencies.

Meanwhile, the Japanese government appointed two academic members widely seen as strong supporters of economic stimulus to the central bank’s board.

Board member Hajime Takata also warned about the risks of inflation exceeding target levels, calling for gradual interest-rate increases.

Limited Reaction to Nvidia Results

Despite strong earnings from Nvidia, futures for both the S&P 500 and Nasdaq slipped 0.1% each, reflecting a lack of clear shift toward risk appetite.

The US Dollar Index, which tracks the greenback against a basket of six major currencies, was steady at 97.678.

Federal Reserve Outlook

Markets continue to price in a pause in interest rates at the upcoming Federal Reserve meeting. According to the CME FedWatch tool, futures currently reflect a 98% probability of rates remaining unchanged at the March 18 meeting.

US 10-year Treasury yields rose slightly by around 0.2 basis points to 4.0518%.

Political and Trade Risks

Uncertainty remains over how US President Donald Trump will respond to the Supreme Court ruling on February 20 that invalidated the emergency tariffs he previously imposed.

US Trade Representative Jamieson Greer said tariff rates on some countries could rise to 15% or more instead of the current 10%, without specifying which countries would be affected.

Geopolitics Back in Focus

Markets are also watching a new round of nuclear negotiations between the United States and Iran in Geneva aimed at resolving the long-running dispute.

Economists at Goldman Sachs said geopolitical developments — including tensions in the Middle East, uncertainty surrounding a potential Russia–Ukraine peace agreement, and fragile US–China relations — remain key risks.

Major Currency Moves

The euro was steady at $1.18, while European Central Bank President Christine Lagarde said policymakers expect inflation to stabilize around 2% soon.

The British pound fell 0.3% to $1.35, with traders focused on local elections in Manchester seen as a key test for Prime Minister Keir Starmer and the Labour Party.

In China, the offshore yuan rose 0.3% to 6.8344 per dollar — its strongest level in nearly three years — despite signals from the central bank indicating a desire to limit rapid currency appreciation.

Gold prices rose in European trading on Thursday, extending gains for a second consecutive session and holding near a four-week high, supported by renewed safe-haven demand ahead of US-Iran nuclear talks scheduled to begin later today in Geneva.

The rally was also supported by weakness in the US dollar in the foreign-exchange market, despite declining expectations that the Federal Reserve will cut interest rates in March. Markets are still waiting for additional signals on the direction of US monetary policy throughout the year.

Price Overview

Gold prices today: Gold climbed 0.8% to $5,205.91 per ounce, up from the session opening level of $5,165.55, while recording an intraday low of $5,155.73.

At Wednesday’s settlement, gold prices rose 0.45%, resuming gains after a brief pause driven by correction and profit-taking from a four-week high of $5,249.88 per ounce.

US–Iran Talks

US envoy Steve Witkoff, alongside Jared Kushner, son-in-law of President Donald Trump, is scheduled to meet an Iranian delegation in Geneva later today for the third round of talks concerning the nuclear الملف, reflecting continued diplomatic efforts despite rising tensions.

Trump had hinted during his State of the Union address on Tuesday at the possibility of striking Iran, stressing that he would not allow — in his words — “the world’s largest sponsor of terrorism” to obtain a nuclear weapon, highlighting a tougher stance on the issue.

US Dollar

The US Dollar Index declined 0.15% on Thursday, extending losses for a second session, reflecting continued weakness in the US currency against a basket of major and minor currencies.

The decline followed increased market uncertainty after Trump’s State of the Union speech, which failed to provide reassurance regarding trade policy stability following the Supreme Court decision that invalidated previous tariffs.

US Trade Representative Jamieson Greer said on Wednesday that tariff rates on some countries could rise to 15% or more compared with the recently imposed 10%, without specifying trading partners or offering further details.

US Interest Rates

• Federal Reserve Governor Christopher Waller said he is open to keeping interest rates unchanged at the March meeting if February labor market data suggest employment conditions have “stabilized” after weaker performance in 2025.

• According to the CME FedWatch tool, markets currently price a 95% probability that interest rates will remain unchanged in March, while the probability of a 25-basis-point cut stands at 5%.

• To reprice those expectations, investors are closely monitoring upcoming US economic data along with comments from Federal Reserve officials.

Gold Outlook

Carlo Alberto De Casa, analyst at Swissquote Bank, said that ongoing tensions between the United States and Iran, combined with global economic uncertainty driven by President Trump’s tariff policies, are supporting gold prices.

He added that global demand for gold has not yet faded, noting that overall sentiment remains positive, with strong buying from Asia and central banks.

SPDR Gold Trust

Gold holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, increased by 3.43 metric tons on Wednesday, marking the third consecutive daily increase and lifting total holdings to 1,097.62 metric tons, the highest level since April 26, 2022.

The euro rose in European trading on Thursday against a basket of global currencies, moving in positive territory for a second consecutive day versus the US dollar, supported by weakness in the US currency amid uncertainty surrounding President Trump’s tariff policies.

The euro’s gains come ahead of European Central Bank President Christine Lagarde’s testimony before the European Parliament in Brussels, where her comments are expected to provide fresh clues on the path of European interest rates throughout this year.

Price Overview

• Euro exchange rate today: The euro rose about 0.2% against the dollar to 1.1829, compared with an opening level of 1.1810, after recording an intraday low at 1.1804.

• The euro ended Wednesday’s session up 0.3% against the dollar, marking its third gain in the past four days, supported by recovery buying from a four-week low at 1.1742.

US Dollar

The dollar index fell 0.15% on Thursday, extending losses for a second straight session, reflecting continued weakness in the US currency against a basket of major and minor currencies.

This decline followed President Donald Trump’s State of the Union address to Congress, which increased market uncertainty as it failed to provide sufficient reassurance about trade policy stability after the Supreme Court invalidated previous tariffs.

The US Supreme Court ruled on Friday that the emergency tariffs imposed by President Donald Trump were invalid. In response, Trump activated new tariffs under a rarely used law known as “Section 122,” which allows duties of up to 15% but requires congressional approval to extend them beyond 150 days. Trump said he would use the 150-day window to develop new tariffs that comply with legal frameworks.

US Trade Representative Jamieson Greer said on Wednesday that tariff rates on certain countries could rise to 15% or higher, compared with the recently imposed 10% rate, though he did not specify which trading partners would be affected.

European Interest Rates

• Money market pricing for a 25-basis-point rate cut by the European Central Bank in March remains stable around 25%.

• Traders have adjusted expectations from keeping rates unchanged throughout this year to pricing in at least one 25-basis-point cut.

Christine Lagarde

To reprice those expectations, investors later today will closely watch ECB President Christine Lagarde’s testimony before the European Parliament’s Economic and Monetary Affairs Committee, scheduled to begin at 08:30 GMT.

Euro Outlook

At FX News Today, we expect that if Lagarde’s comments come in more hawkish than markets currently anticipate, expectations for ECB rate cuts this year would decline, leading to further gains in the euro against a basket of global currencies.

The Japanese yen rose in Asian trading on Thursday against a basket of major and minor currencies, attempting to recover from a two-week low versus the US dollar amid renewed buying interest at lower levels, supported by more hawkish comments from Bank of Japan Governor Kazuo Ueda.

Ueda said the central bank will closely examine economic data during its March and April meetings when deciding whether to raise interest rates, leaving the door open for a potential near-term hike.

Price Overview

• Japanese yen exchange rate today: The US dollar fell 0.4% against the yen to 155.75, compared with an opening level of 156.36, after touching an intraday high of 156.37.

• The yen ended Wednesday’s session down 0.3% against the dollar, marking a second consecutive daily loss and reaching a two-week low of 156.82.

• The decline was attributed to the Japanese government’s appointment of two academics viewed as strong advocates of economic stimulus to the central bank’s policy board, fueling concerns about the pace of future rate hikes.

Kazuo Ueda

In an interview with Yomiuri newspaper, Bank of Japan Governor Kazuo Ueda stated that the bank’s baseline stance remains to “continue raising interest rates” if the probability of achieving the bank’s economic, inflation, and price forecasts increases.

Ueda added that the central bank will carefully analyze incoming data during the upcoming March and April monetary policy meetings to determine whether further rate increases are warranted.

He noted that the outcome of this year’s annual wage negotiations could be a decisive factor. If wage hikes come in stronger than expected and prompt companies to raise prices more quickly, the 2% inflation target could be reached sooner than anticipated.

Ueda also said that underlying inflation has not yet sustainably reached the 2% target, but the bank will calibrate policy to ensure the target is achieved without excessive overshooting, emphasizing that the central bank is not “behind the curve” in addressing elevated inflation risks.

Japanese Interest Rates

• Following these comments, market pricing for a 25-basis-point rate hike at the March meeting rose from 3% to 15%.

• Pricing for a similar hike at the April meeting increased from 30% to 45%.

• In the latest Reuters survey, expectations suggest the Bank of Japan could raise rates to 1% by September.

• Investors are now awaiting further data on inflation, unemployment, and wages in Japan to reassess these probabilities.