Japanese yen weakens as dollar rebounds

The yen slipped past 147 per dollar on Thursday, retreating from a two-month high hit in the prior session as the dollar strengthened after the Federal Reserve’s latest policy decision.

On Wednesday, the Fed delivered a widely expected quarter-point cut, while signaling two more reductions this year but only one in 2026, pushing back against expectations for two or three cuts next year.

Domestically, the Bank of Japan began its two-day policy meeting, where rates are expected to be kept unchanged as officials assess the impact of US tariffs on Japan’s export-driven economy.

Still, analysts noted the BOJ could raise rates by 25 basis points in October amid signs of resilience.

Politically, the ruling Liberal Democratic Party will choose a new leader on October 4 to succeed outgoing Prime Minister Shigeru Ishiba.