FX.co ★ Yen Strengthens as Dollar Slips on Weak US Data

The Japanese yen maintained its stability at approximately 142.9 on Thursday, building on a nearly 1% gain from the previous session. This was largely due to a broad weakening of the dollar, triggered by disappointing US economic data. Recent reports have highlighted a significant slowdown in private-sector hiring and an unexpected downturn in the US services sector, fueling concerns that ongoing trade policy uncertainties are starting to impact the broader economy. On the domestic front, Japan recorded a fourth consecutive decline in real wages for April, as inflation continued to surpass nominal wage growth. This trend heightens worries about Japan's economic prospects, particularly amid escalating global tensions from rising US tariffs. The weak wage data also presents challenges for the Bank of Japan's plans for policy normalization. Nonetheless, BOJ Governor Kazuo Ueda reiterated on Tuesday that the central bank remains ready to raise interest rates should economic and inflation forecasts be met, supporting the anticipation of a gradual tightening cycle.