Yen Loses Steam Amid Criticism of Japan's Tax-Cutting Plans

The Japanese Yen has trimmed its gains after an exceptional US-Japan coordinated intervention last week, which triggered a 4.5% appreciation in the currency.

The USD/JPY pair is now hovering near levels of 158.00, despite the broad-based US Dollar weakness.

Analysts at Rabobank note that the recent approval by Japan's cabinet to cut the sales tax on food for two years has drawn criticism from both the opposition and people within the ruling LDP, as well as market participants.

The Bank of Japan's ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence with other central banks.