Japanese Yen Weakens for Second Day
The Japanese yen slipped to around 147.5 per dollar on Friday, marking its second consecutive day of losses as markets digested the implications of the new US-Japan trade agreement. The deal imposes a 15% tariff on Japanese exports to the US, significantly lower than the 25% previously threatened by Trump, providing some relief but keeping trade tensions in focus.
On the economic front, Tokyo’s core inflation for July came in slightly below expectations but remained well above the BOJ’s 2% target, reinforcing speculation of another rate hike later this year. The BOJ will announce its policy decision next week and is widely expected to keep rates unchanged amid concerns about the economic fallout from US tariffs.
However, the central bank is also likely to revise up its inflation forecast in its quarterly outlook. Earlier this week, BOJ's Uchida signaled a cautious stance on further tightening, citing heightened uncertainty over US trade policy and its broader global implications.
Source: Trading Economics
