Japanese Yen advances to fresh two-week highs against a weaker USD

The Japanese Yen (JPY) regained positive traction following an early Asian session slide in reaction to Japan’s upbeat Machinery Orders data, which countered recession fears and boosted hopes for an economic recovery.
this comes on top of expectations that the Bank of Japan (BoJ) will hike interest rates again in 2025 and provide a goodish lift to the JPY. Apart from this, the flight to safety is seen as another factor underpinning the JPY.
US President Donald Trump’s proposed sweeping tax bill fueled concerns about the US government’s fiscal health. This, along with renewed US-China tensions, takes its toll on the global risk sentiment and forces investors to take refuge in traditional safe-haven assets, including the JPY.
This, along with the prevalent US Dollar (USD) selling bias, drags the USD/JPY pair to a two-week low, closer to the 143.00 round figure on Thursday.
The Bank of Japan recently showed a willingness to hike interest rates further this year amid signs of broadening inflation in Japan. Moreover, investors expect that rising wages could lead to a significant increase in consumption, which, in turn, should allow the central bank to continue on its path of policy normalisation.
Source: Fxstreet