21.08.202501:33:15UTC+00Japanese Yen Eases on Policy Uncertainty

On Thursday, the yen weakened to approximately 147.5 against the dollar, interrupting a two-day recovery as uncertainties surrounding the Bank of Japan's policy direction persisted. The BOJ is under increasing pressure to raise interest rates, given elevated inflation and the sluggish pace of wage growth relative to price increases. During its July meeting, the central bank raised its inflation forecast and signaled the possibility of a rate hike by the year's end. Nonetheless, Governor Kazuo Ueda has approached the situation with caution, highlighting that "underlying inflation" has yet to solidly achieve the 2% target. In terms of economic data, Japan’s manufacturing sector showed signs of nearing stability in August, although growth in the services sector decelerated. Meanwhile, investors are looking to the Federal Reserve's Jackson Hole symposium for insights on the global interest rate outlook.