Japanese Yen Hits 6-week Low

The Japanese yen weakened to around 160.2 per dollar on Friday, surrendering some of the previous session's gains as investors awaited the Bank of Japan's policy meeting next week, where it is widely expected to raise interest rates amid persistent inflation and sustained weakness in the currency. The BOJ is expected to lift its policy rate by 25 basis points to 1%, marking the first increase since December last year and the highest level since 1995. Meanwhile, BOJ Governor Kazuo Ueda has been hospitalized with a hepatic cyst infection and is set to miss the meeting. On Thursday, the yen climbed as much as 0.6% after the dollar retreated sharply following President Donald Trump's remarks that a peace deal with Iran could be signed as soon as this weekend in Europe. Japan's economy remains particularly exposed to geopolitical tensions in the Middle East due to its heavy dependence on oil imports from the region.

The Japanese Yen touched 160.57 against the USD, the lowest since April 2026. Over the past 4 weeks, US Dollar Japanese Yen gained 1.87%, and in the last 12 months, it increased 11.91%.

The Japanese yen traded around 160.5 per dollar on Thursday, lingering near its weakest level since July 2024 even as the country’s wholesale inflation accelerated at the fastest pace in three years on the back of soaring energy prices. Japan’s producer prices rose 6.1% in May from a year earlier, following an upwardly revised 5.3% increase in April and exceeding market expectations of a 5.5% gain. The latest data strengthened expectations that the Bank of Japan will raise interest rates next week as policymakers contend with mounting inflationary pressures fueled by the Middle East conflict and the yen’s sharp depreciation. Investors are also looking for hawkish signals from BOJ Governor Kazuo Ueda, with markets increasingly speculating on another rate hike in September and the possibility of a third increase in December.