FX.co ★ Japanese Yen Extends Decline

The Japanese yen declined towards 157 per dollar on Thursday, extending its losing streak to a third consecutive session. This drop was influenced by a stronger US dollar and escalating geopolitical tensions affecting the currency. The US dollar appreciated broadly against major currencies, as mixed economic indicators from the US provided little clarity on the Federal Reserve's future policy direction. Additionally, investors considered the repercussions of increasing tensions between Japan and China following Beijing's decision to impose export restrictions on military-use products to Japan. Domestically, Japan witnessed a 2.8% reduction in real wages in November, with inflation significantly outpacing wage growth, posing a challenge to the Bank of Japan's intended policy tightening. Earlier in the week, Governor Kazuo Ueda emphasized that the central bank remains committed to raising interest rates should economic and inflation trends align with their projections.