Yen’s Slide Spurs Dollar Surge Amid Bank of Japan's Growth Downgrade

The yen fell as the Bank of Japan revised growth forecasts due to U.S. tariffs, boosting the dollar. Investors await U.S. job data while seeking signs of a calming trade war. Despite trade-related concerns, potential deals with China and others have been hinted at, offering economic optimism.

The yen declined on Thursday as the Bank of Japan reduced growth forecasts, citing U.S. tariffs, which in turn elevated the dollar. The yen slipped by 0.8% to 144.23 per dollar, marking its weakest level since April, as investors remain on alert for signs of a cooling trade war.

U.S. employment data is eagerly anticipated, while market observers also watch for potential de-escalation of trade tensions. The Bank of Japan's lowered growth projections weakened prospects for future rate hikes, impacting trade dynamics influenced by President Trump's tariff policies.

Encouragingly, Trump hinted at potential trade deals, notably with China. Despite previous disruptions, the dollar rallied as the euro and sterling weakened. Upcoming U.S. economic indicators, including jobless claims and the ISM manufacturing survey, remain critical in assessing recession threats.

(With inputs from agencies.)