FX.co ★ Yen Pulls Back as BOJ Outlook Weighed

The Japanese yen weakened to approximately 148.7 against the dollar on Tuesday, halting a two-day upward trend as investors processed mixed messages from the Bank of Japan. According to the Summary of Opinions from the September meeting, some policymakers were in favor of raising rates further if projections for growth and inflation remained stable, while others advocated for maintaining low rates to shield the economy from the impacts of US tariffs. One member recommended a cautious, observational approach, citing the importance of global trade policies, US monetary policies, currency fluctuations, and domestic wage and price trends. Another member suggested that conditions might be favorable for considering another rate hike, noting that more than six months had passed since the previous adjustment. On the economic front, Japan's retail sales declined by 1.1% in August, missing the forecasted 1% increase, which marked the first decline since February 2022. Additionally, industrial output fell more than expected.