The Japanese yen strengthened toward 143 per dollar on Thursday, reaching its highest level in over two weeks, as mounting concerns over the US fiscal outlook weighed on the greenback.
The yen's rally was fueled by expectations that President Donald Trump's proposed tax cuts projected to add more than $3 trillion to US debt could destabilize financial markets and undermine confidence in US assets.
On the diplomatic front, Japanese Finance Minister Katsunobu Kato said he did not discuss exchange rate levels with US Treasury Secretary Scott Bessent during the G7 meetings in Canada downplaying speculation of coordinated currency intervention.
Domestically, economic data sent mixed signals. Japan's core machinery orders a leading indicator of capital investment—surged 13% in March, sharply beating forecasts for a 1.6% decline. However, PMI data showed manufacturing activity remained in contraction territory in May, while services sector growth continued to decelerate.
Source: Trading Economi
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