0810 GMT - The yen stands out in the wake of Trump's tariffs, declining slightly, while the Aussie and euro slid more than 1%. This raises the question of whether the JPY has finally reached a bottom, says Louis Gave of Gavekal Research. The BOJ is sounding more hawkish, setting the stage for rate differentials with the U.S. and EU to continue shrinking, he adds. Japanese financials are outperforming and taking the promise of BOJ hikes in stride. Japan could also find itself in Trump's tariff crosshairs, as his administration has been vocal about revaluing undervalued currencies, and the yen is excessively cheap relative to most other major currencies, he says. "Any one of these factors would make it risky to stay short the yen. Together, they may well provide a catalyst for a move higher," he says. (fabiana.negrinochoa@wsj.com)

(END) Dow Jones Newswires

February 03, 2025 03:10 ET (08:10 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.