FX.co ★ Yen Extends Losses on Weak Wage Data

The Japanese yen declined to approximately 147.7 against the dollar on Wednesday, building on losses from the previous session. This decline was fueled by disappointing wage data, which has reignited economic concerns. In June, real wages in Japan decreased for the sixth consecutive month, as inflation continued to exceed wage growth. This persistent trend poses a challenge for the Bank of Japan's strategy towards further policy tightening. The recent data has raised doubts about imminent interest rate increases, particularly as the BOJ grapples with sluggish wage growth, persistent inflation, and ongoing uncertainties in global trade. Moreover, minutes from the BOJ's June meeting revealed that policymakers are receptive to further tightening should trade tensions subside. Meanwhile, an official from the Ministry of Finance emphasized the need for policy flexibility, especially concerning bond purchase operations to maintain market stability. Last week, the central bank maintained its interest rates but adjusted its inflation forecast upward, cautioning about the mounting downside risks from global trade issues.