The Japanese yen remained weak at around 152 per dollar on Thursday, as investors digested a mix of domestic economic concerns and external pressures.
Japanese yen holds decline amid weak data
Core machinery orders, a key indicator of capital spending, unexpectedly declined in December, raising concerns about business investment. At the same time, Japan posted a larger-than-expected trade deficit for January, as imports outpaced exports, adding to signs of economic fragility. These disappointing data points reinforced skepticism about the strength of Japan’s recovery, keeping the yen under pressure.
Focus on BoJ moves
Despite the currency's weakness, expectations for further monetary tightening by the Bank of Japan continue to offer some support. While speculation persists that the central bank could raise interest rates again this year, uncertainty lingers over whether policymakers will move as early as March. Some analysts believe the BoJ may wait for clearer signs of sustainable wage growth and inflation before making another move.
Yen challenged by strong US dollar
Externally, the yen is also facing headwinds from a stronger US dollar, which gained traction following fresh trade policy announcements from President Donald Trump. Trump reaffirmed his intention to impose a 25% tariff on auto imports, alongside similar duties on semiconductors and pharmaceuticals, fueling concerns about escalating trade tensions. If implemented, these measures could disrupt global supply chains, particularly in Asia, and weigh further on the yen. Traders are now closely watching upcoming economic releases and central bank signals for further direction.
