The yen gained 0.27% to 151.94 per dollar, reversing earlier losses after Monday’s data showed Japan’s economy expanded faster than expected in the fourth quarter. This reinforces expectations that the Bank of Japan (BOJ) could tighten policy more aggressively than initially anticipated, with traders now pricing in 35 basis points of additional rate hikes by December.
Despite this, the dollar remains resilient, as investors digest last week’s weaker U.S. retail sales data and a delay in the implementation of Donald Trump’s proposed reciprocal tariffs. The geopolitical landscape is also in focus, with discussions set to begin in Saudi Arabia on resolving the Russia-Ukraine conflict, lending some support to the euro, which hovers around $1.0487.
