FX.co ★ Japanese Yen Weakens as BOJ Holds Rates Steady

On Wednesday, the Japanese yen fell to approximately 149.5 per dollar, continuing its downward trend for the fourth day in a row. This decline came after the Bank of Japan decided to maintain the interest rate at 0.5%, a move widely anticipated by the market. The central bank reiterated its expectation that Japan’s economy would likely continue to grow above its potential; however, it did note some emerging signs of weakness. The policy makers adopted a cautious approach, opting to evaluate the potential impact of increasing global economic risks, especially heightened US tariffs, on the domestic economy. Market participants now look forward to further insights from Bank of Japan Governor Kazuo Ueda's comments following the meeting. In parallel, the monthly Reuters Tankan survey indicated that Japanese manufacturers became pessimistic in March due to concerns about US tariffs and a slowing Chinese economy. Additionally, separate data showed that Japan's trade balance shifted to a surplus in February, supported by robust export activity.