The Japanese yen slipped past 149 per dollar on Thursday, retreating from four-and-a-half-month highs as the greenback strengthened amid concerns over US President Donald Trump’s escalating tariff policies.
Japanese yen decreases past 149 per dollar
The dollar's rise was fueled by safe-haven demand and shifting market expectations regarding US monetary policy, as investors assessed the potential impact of trade tensions on global economic growth.
On Wednesday, Trump announced that his administration is considering imposing 25% “reciprocal” tariffs on European autos and other goods, a move that heightened fears of a trade war between the US and the European Union. Additionally, he confirmed that tariffs on Mexico and Canada, originally set to take effect on March 4, would now be implemented on April 2, giving businesses slightly more time to prepare for potential supply chain disruptions.
Despite pullback, yen remains near multi-month highs
Despite the yen’s pullback, it remained near multi-month highs, supported by growing expectations that the Bank of Japan (BOJ) will continue to tighten monetary policy in 2025. Recent economic data, including an upside surprise in fourth-quarter inflation, has strengthened the case for further rate hikes, as the central bank aims to gradually unwind its long-standing ultra-loose policy stance.
Eyes on Friday reports
Investors are now closely watching key economic reports due on Friday, including industrial production, retail sales, and Tokyo inflation figures, which could provide further clarity on Japan’s economic trajectory and the BOJ’s policy outlook. Strong data could reinforce bets on additional rate hikes, offering support to the yen, while weaker figures might ease some of the pressure on the BOJ to act aggressively. Market participants are also keeping an eye on any potential intervention from Japanese authorities, as officials have previously signaled concerns about excessive currency volatility.
