Yen weakens to 4-month low amid US dollar strength

The Japanese yen weakened to around 156 per dollar on Thursday, hitting its lowest level in nearly four months, as domestic policy uncertainties combined with hawkish expectations in the US under the incoming Trump administration.

Yen weakens to 4-month low amid US dollar strength

Despite data showing Japan's producer inflation surged at its fastest pace in October of over a year, market sentiment about the Bank of Japan’s policy stance remained mixed, especially after recent political shifts. The central bank, however, maintained its forecast to potentially raise its benchmark rate to 1% by the second half of fiscal 2025. Investors are awaiting Japan’s third-quarter GDP data on Friday for further insight into the country’s economic outlook.

Yen weighed down by strong US dollar and "Trump Trades"

Externally, the yen remains under pressure from a stronger US dollar as traders continue to favor "Trump trades," even with expectations that the Federal Reserve will gradually reduce borrowing costs.