FX.co ★ Yen Holds Steady After Strong Data

The Japanese yen hovered around 158 per dollar on Thursday, trading in a tight range after data showed the country’s current account surplus rose to 4.062 trillion yen in August, beating forecasts of 3.194 trillion yen. Even so, the currency remained under pressure due to the wide yield gap between the US and Japan, persistently low domestic interest rates, and Japan’s large public debt burden. Prime Minister Sanae Takaichi continued to pursue expansionary fiscal measures, vowing to cut the consumption tax on food while emphasizing that the government would secure financing without issuing additional bonds to reassure financial markets. At the same time, Bank of Japan Policy Board member Ayano Sato—who had opposed the central bank’s rate hike in September—stated this week that she favors a gradual, multi-step approach to raising interest rates, reinforcing expectations that policymakers may tighten policy further.