The yen was last 0.3% stronger against the dollar at ¥155.87, regaining some lost ground after hitting its weakest levels in two weeks, as comments from Bank of Japan officials steadied the Japanese currency.
The yen is recovering from weakness earlier in the week after the Japanese government on Wednesday appointed two academics viewed as strong advocates of economic stimulus to the central bank’s board. The Mainichi newspaper also reported on Tuesday, citing unnamed sources, that Japanese prime minister Sanae Takaichi expressed reservations about additional interest rate hikes during her meeting with Bank of Japan governor Kazuo Ueda last week.
Recent news flow has “reinforced the perception that the Takaichi administration favors a dovish stance on monetary policy”, Bank of America said in a note. “However, leaving yen depreciation unchecked carries political risks, and FX intervention alone would be insufficient. Policy inaction remains unlikely.”
BOJ Governor Ueda said the central bank would scrutinise data at its March and April meetings in deciding whether to raise interest rates, the Yomiuri newspaper reported on Thursday, leaving open the chance of a near-term rate hike.
Meanwhile, hawkish board member Hajime Takata said in a speech that the central bank must focus on the risk of an inflation overshoot in guiding monetary policy and called for a gradual rise in interest rates.
“Further efforts from the Takaichi government to influence the BOJ threaten another round of turmoil in Japan’s bond and currency markets,” analysts from Capital Economics wrote. “But we think the underlying fundamentals point towards continued stabilisation in the JGB market and a rebound in the yen.”
The US dollar index, which measures the greenback’s strength against a basket of six currencies, was steady at 97.585 as uncertainty persisted over how US President Donald Trump would respond to the Supreme Court’s ruling on Feb 20 that struck down his emergency tariffs.
The US tariff rate for some countries will rise to 15% or higher from the newly imposed 10%, US trade representative Jamieson Greer said on Wednesday, without naming any specific trading partners or giving further details.
“President Trump’s 2026 State of the Union address focused on the economy but provided little-to-no information on new policy initiatives,” wrote analysts from Westpac. The US trade representative “offered no details regarding how the higher tariff will be applied in situations where it breaches US trade deals.”
Investor confidence got a boost after AI industry bellwether Nvidia forecast first-quarter revenue above market estimates on Wednesday, providing fresh fuel for stocks on Wall Street, which extended their tech-led rally to touch two-week highs. However, the stock eased off gains in after-hours trading, with US equity futures edging lower.
The yield on the US 10-year Treasury bond was last up 0.2 basis points at 4.0442%.
Financial markets continue to believe almost unanimously US interest rates are going nowhere at the Federal Reserve’s next meeting. Fed funds futures are pricing an implied 98% probability the US central bank will keep rates on hold at its next two-day meeting on March 18, little changed from a day earlier, according to the CME Group’s FedWatch tool.
Against the Chinese yuan in offshore trade the US dollar slipped 0.3% to 6.8324 yuan, the strongest level for the Chinese currency in almost three years despite the central bank signalling it wanted to curb the currency’s rapid gains, underpinned by seasonal settlement demand.
The euro was last up 0.1% at US$1.1817, while the British pound was also little changed at US$1.3555.
The Australian dollar was steady at US$0.7126, while the New Zealand dollar briefly slipped below the US$0.60 mark against its US counterpart before recovering, last trading flat at $0.6003.
Bitcoin was last down 0.7% at US$68,478.38, while ether tumbled 2.0% to US$2,059.01.