Yen Slumps Amid Trump Tariff Uncertainty and BOJ Caution

The Japanese yen is facing its longest losing streak in over a month as uncertainty grows over whether Japan will be included in former President Donald Trump’s new tariff plan. The yen weakened by 0.8% against the U.S. dollar on Wednesday, hitting ¥153.73 — its lowest level in a week — after previously benefiting from expectations of a Bank of Japan (BOJ) rate hike.

Japan’s trade minister Yoji Muto urged Trump to exempt Japanese companies from the proposed 25% tariffs on steel and aluminum, but concerns over potential trade retaliation weighed on the yen. Analysts warn that if Japan is targeted, it could complicate the BOJ’s policy outlook.

Despite recent losses, the yen remains the top-performing G10 currency this year. However, further declines may prompt Japanese authorities to intervene, especially as BOJ Governor Kazuo Ueda closely monitors U.S. economic policy. Traders are now awaiting key U.S. inflation data, which could further impact rate expectations and the yen’s trajectory.