Investor risk appetite is expected to remain subdued in the near term, according to Hirofumi Suzuki, chief FX strategist and head of Treasury Research at SMBC.

• reciprocal U.S. tariffs fully in effect later today
• risk sentiment is likely to stay deteriorated

While talks to roll back some tariffs are underway, Suzuki cautioned that any meaningful progress is unlikely in the short term. The situation is further complicated by the emergence of countermeasures—including U.S. retaliation against China’s own retaliatory tariffs—which he said is exacerbating investor anxiety.

As a result, the Japanese yen could see further upside against the U.S. dollar.

• environment is placing upward pressure on the yen,
• USD/JPY could fall by another 1 to 2 yen by the end of the week