The yen weakens slightly after a four-day rally, with traders cautious amid a widening US-Japan interest rate gap.
The USD/JPY pair retreated modestly in early Asian trading Thursday, halting a four-day advance but showing limited downward momentum. Spot prices hovered just below the mid-162.00 level, close to a four-decade peak reached earlier this week.
The yen’s pullback follows a period of relative strength, though traders remain wary of the persistent divergence between US and Japanese interest rates. The Bank of Japan’s ultra-loose policy contrasts with the Federal Reserve’s higher-for-longer stance, keeping pressure on the yen.
Market reaction has been muted, with the pair lacking clear directional conviction amid mixed signals from intervention risks and yield differentials.