Currencies Turbulence: Trade Wars, Yen Gains, and Central Banks' Dilemma

The article discusses the instability of the dollar amid global trade tensions, highlighting the yen's rise due to favorable conditions in Japan. Key issues include President Trump's tariff policies, central banks' challenges with inflation growth, and currency fluctuations in response to trade policies.

The dollar faced difficulty gaining ground on Thursday as global trade tensions heightened inflation and growth concerns in the U.S. Concurrently, the yen gained strength amid positive domestic developments, fuelling expectations for Japan's policy tightening.

In the Asian markets on Thursday, trader sentiment relaxed as focus shifted from U.S. trade issues to Japanese developments. The yen's 0.3% increase against the dollar was bolstered by BOJ Governor Kazuo Ueda's comments on the bank's balance sheet reduction strategy.

Fueling market uncertainty are U.S. President Donald Trump's unpredictable policies, which have prompted varied responses from global currencies. Central banks are grappling with balancing economic growth against the risk of resurgent inflation, as exemplified by the Bank of Canada's recent rate cut.

(With inputs from agencies.)