Yen eases as Powell’s caution lifts dollar

The Japanese yen weakened toward 148 per dollar on Wednesday, giving back early-week gains as the dollar strengthened after US Federal Reserve Chair Jerome Powell adopted a cautious stance on further policy easing.

Powell stressed that the rate-cut path remains unclear as the Fed faces the challenge of curbing inflation while supporting a softening labor market.

At home, data showed Japan’s manufacturing sector contracted at the sharpest pace in six months in September, while services growth slowed to a three-month low.

Companies continued to express caution over the outlook amid domestic uncertainty and shifting global trade policies.

Looking ahead, investors await Tokyo inflation figures and the Bank of Japan’s July meeting minutes for signals on the policy path.

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