19.02.202601:06:42UTC+00Yen Holds Decline on Hawkish Fed Signals

The Japanese yen traded around 154.7 per dollar on Thursday, stabilizing after a roughly 1% drop in the previous session—its steepest one-day decline this month—driven by a stronger dollar following robust US economic data and unexpectedly hawkish signals from the Federal Reserve. Minutes from the Fed’s latest meeting revealed that several officials supported wording that would have explicitly kept the option of raising the federal funds rate open if inflation remained above target.

On the domestic front, data showed that Japan’s machinery orders rebounded sharply in December after a slump in November, boosted by large, one-off orders from refineries and nuclear fuel producers. Investors also continued to assess Japan’s economic outlook, with Prime Minister Takaichi expected to push for faster budget deliberations. At the same time, markets are increasingly pricing in a possible rate hike by the Bank of Japan in April, as additional data due before then could give policymakers enough justification to start tightening monetary policy.