Yen weakens on trade tensions and soft growth

The Japanese yen slipped to around 155 per dollar on Tuesday, reversing yesterdays gains as the US dollar regained support amid ongoing trade uncertainty. Renewed tariff threats from the US added to market caution, while Japan reaffirmed its commitment to the bilateral trade agreement. Concerns over Japans fiscal outlook have also intensified amid expectations of additional stimulus measures to support the economy. At the same time, weak fourth-quarter GDP data has reduced expectations for a near-term interest rate hike by the Bank of Japan. Investors are now focused on upcoming US economic data, including consumer confidence and regional manufacturing indicators, as well as speeches from Federal Reserve officials, for further direction in the USD/JPY pair.

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