The Japanese yen weakens against the US dollar as global risk appetite rises and investors await Bank of Japan policy guidance

The Japanese yen weakened further against the US dollar on Thursday, reaching its lowest level in more than a week during early European trading, as improving global risk sentiment reduced demand for traditional safe-haven assets.

Also read: Bank of Japan Signals Possible Rate Hike Amid Yen Slide

The decline followed a boost in investor confidence after US President Donald Trump eased trade tensions with Europe and indicated progress on a framework agreement over Greenland, prompting gains in US and Asian equities.

The yen’s weakness has been intensified by a selloff in Japan’s bond market, which pushed long-dated government yields to record highs amid concerns over fiscal sustainability under Prime Minister Sanae Takaichi’s expansionary policies.

Nevertheless, losses have been moderated by expectations that Japanese authorities may intervene to curb excessive depreciation.

Market focus remains on the Bank of Japan’s two-day policy meeting concluding on Friday, with Governor Kazuo Ueda’s remarks expected to provide guidance on the timing of future rate hikes.

Persistent inflation above the BoJ’s 2% target and a weaker yen could prompt a more hawkish stance.

Also read: Global Markets Rally on Rate-Cut Hopes and Geopolitical Optimism

USD/JPY momentum has been reinforced technically after breaking key resistance near 158.15, with analysts watching potential moves toward 159.45 or short-term support around the 100-hour moving average.