FX.co ★ Japanese Yen Slips as US Tariffs Loom

The Japanese yen slipped past the 150 yen per dollar mark once more on Wednesday, reversing the gains it had made the previous day. This decline is largely attributed to investor anticipation of forthcoming US reciprocal tariffs, which may pose significant challenges to key Japanese export sectors. The increase in risk assets, such as equities and commodities, has further reduced the appeal of the yen, traditionally viewed as a safe-haven currency. Domestically, the minutes from the Bank of Japan's January meeting disclosed that its policymakers remain prepared to consider further interest rate hikes, should there be increases in wage levels and inflation. A member of the BOJ suggested that the policy rate might rise to 1% by the second half of fiscal year 2025. Just last week, the Bank of Japan decided to keep its policy rate unchanged at 0.5%, with officials maintaining a prudent approach given the monitoring of global economic uncertainties, especially the possible repercussions of heightened US tariffs.