FX.co ★ Japanese Yen Slips on Risk-On Mood

The Japanese yen fell beyond 148 against the dollar on Wednesday, relinquishing the gains of the previous session as a surge in global risk assets diminished the demand for this safe-haven currency. This movement followed the release of US inflation data, which reinforced the anticipation that the Federal Reserve might reduce interest rates next month. In Japan, the sentiment among manufacturers showed improvement for the second straight month in August after successfully reaching a trade agreement with Washington. This accord led to a reduction of US tariffs on cars and other goods to 15%, in return for a substantial $550 billion investment package from Japan. Meanwhile, the growth in producer prices eased to an 11-month low in July, highlighting the mounting pressure on local companies due to increased US tariffs. On the monetary policy front, Bank of Japan board members remain divided regarding the timing and pace of prospective rate hikes. Some officials advocate for maintaining an accommodative policy for the time being, citing uncertainties about whether the bank's economic forecasts will be realized.