FX.co ★ Japanese Yen Pressured by Dollar Strength

The Japanese yen dipped below 145 per dollar on Thursday, reaching almost a three-week low, influenced by the strengthened US dollar. The dollar appreciated in response to the Federal Reserve's decision to keep interest rates steady while adopting a cautious stance towards future policy adjustments. The Fed also cautioned that tariffs imposed by President Trump could trigger inflation. Additionally, the dollar outperformed the yen, benefiting from its status as a safe-haven currency amid escalating geopolitical tensions, particularly concerns over potential deeper US involvement in the Israel-Iran conflict in the Middle East. In contrast, the Bank of Japan maintained its interest rates on Tuesday and indicated a gradual approach toward reducing its balance sheet. BOJ Governor Kazuo Ueda emphasized monitoring both domestic and international conditions, suggesting the possibility of future interest rate hikes if inflationary pressures make it necessary.