The Japanese yen weakened after the Bank of Japan decided to keep interest rates steady and revised down its economic growth outlook, citing the impact of US tariffs.
The BOJ also pushed back the expected timeline for reaching its inflation target by roughly a year. Governor Ueda emphasized there is no urgency to raise rates at this time, signaling a cautious approach as global risks persist.
At the same time, the US dollar stabilized after earlier declines that followed President Trump’s tariff announcements. Currency markets reacted to the combination of central bank guidance and shifting trade policy rhetoric.
Investors are now focused on upcoming US employment data due Friday, which could influence short-term dollar moves. Market participants are also monitoring signs that trade tensions might ease, as the president indicated potential trade agreements with several partners, including China. Any progress on trade talks or fresh tariff developments will likely shape investor sentiment and currency flows in the near term.
Overall, the BOJ’s decision and its revised outlook underscore how trade policy and global growth concerns are feeding into central bank thinking, while forex markets weigh the balance between risk appetite and safe-haven demand.