Dollar Strengthens Amid Tariff Uncertainty and U.S. Services Surge

The dollar reached a three-week high against the yen following strong U.S. services data and optimism over trade tariffs. Trump's comments suggesting some threatened tariffs may not be imposed bolstered market sentiment. Meanwhile, the market remains uncertain about the potential impacts of tariffs and currency movements.

The dollar has hit a three-week peak against the yen as robust U.S. services data and cautious optimism surrounding tariffs fuel investor confidence. President Donald Trump hinted not all proposed tariffs would be enacted, easing fears of a U.S. economic slowdown and boosting Wall Street morale overnight.

As of now, the dollar stands at 150.56 yen, climbing overnight above the 150 mark and reaching 150.92 yen in early Asian trading. Despite these gains, market uncertainty about tariffs persists, indicated by a lack of momentum in pushing the dollar higher.

Analysts, including Mizuho Bank's Vishnu Varathan, stress the mercurial nature of Trump's tariffs, which have left markets hesitant to act prematurely. Meanwhile, strong U.S. services PMI figures have pushed yields upward, contrasting with Japan's economic contraction. The market watches closely as the Bank of Japan signals caution amidst global uncertainties.

(With inputs from agencies.)