Yen Rises as Dollar Slips on Weak US Jobs Data and Growing BoJ Expectations

The US Dollar slid against the Japanese Yen on Thursday as fresh labor-market figures pointed to a cooling US economy, adding pressure on the currency while speculation about possible policy tightening in Japan grew stronger.

The latest jobless data showed a marked rise in new unemployment claims, signaling that the US labor market may be losing momentum. This comes just one day after the Federal Reserve cut interest rates, reinforcing expectations that additional rate reductions may follow next year as economic conditions soften.

The Dollar also faces broader uncertainty amid discussions about future leadership at the central bank and concerns about the overall direction of US monetary policy. A more cautious policy outlook continues to weigh on the currency.

Meanwhile, the Japanese Yen is finding solid support. Investors are increasingly convinced that Japan may be nearing its first interest-rate hike in years, following recent remarks suggesting that economic conditions are gradually aligning with the Bank of Japan’s criteria for policy normalization. Rising domestic price pressures and cautious global sentiment further boost demand for the Yen as a safe-haven asset.

With attention now turning to the Bank of Japan’s upcoming policy meeting, the market remains on alert for any signals of a shift in Japan’s long-standing ultra-loose monetary stance. Until then, the combination of weaker US data and growing expectations of Japanese tightening keeps the Dollar–Yen pair on the defensive.

The US dollar is retreating against the Japanese yen today, with the pair trading at 155.23 yen, down 0.49% from the previous close at 156.00 yen. The decline comes amid rising expectations of monetary tightening in Japan, while weak US data following the Federal Reserve’s recent rate cut is weighing on the dollar and reinforcing forecasts of further cuts ahead, supporting the yen’s strength against the dollar in today’s trading.