FX.co ★ Yen Eases Despite Hawkish BOJ Commentary

The Japanese yen weakened beyond 143 per dollar on Tuesday, retreating from its four-week high, despite assertive comments from Bank of Japan Governor Kazuo Ueda. Ueda indicated that the central bank is prepared to modify its monetary policy approach as necessary to achieve its sustainable inflation target, emphasizing the importance of decisions based on data. He also cautioned about potential upward pressure on core inflation due to rising food prices. Recent figures revealed that Japan’s core inflation rate unexpectedly rose to 3.5%—its highest in more than two years—supporting the argument for additional interest rate increases. Nonetheless, the yen remained relatively strong as the dollar faced challenges from fiscal and trade-related uncertainties in the United States. President Trump’s sudden change in tariff policy—threatening 50% duties on the European Union before postponing their enforcement—has contributed to global investor caution.