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India Budget 2026: Modi Government Eyes Reforms Amid Global Uncertainty and Fiscal Pressures 
China Manufacturing PMI Slips Into Contraction in January as Weak Demand Pressures Economy 
Dollar Holds Firm as Markets Weigh Warsh-Led Fed and Yen Weakness Ahead of Japan Election 
EU Recovery Fund Faces Bottlenecks Despite Driving Digital and Green Projects 
The Japanese yen slipped on Thursday after the Bank of Japan (BOJ) kept interest rates unchanged, while the U.S. dollar maintained its strength as traders scaled back expectations of another Federal Reserve rate cut this year. The yen fell 0.1% to 152.90 per dollar, reversing earlier gains. The euro rose 0.2% to 177.50 yen, and the British pound climbed 0.15% to 201.70 yen.
As widely anticipated, the BOJ maintained its current monetary policy stance but reaffirmed its commitment to gradually raising borrowing costs if economic growth aligns with forecasts. Analysts suggest the central bank is likely to remain cautious under the newly elected Takaichi administration, which is preparing another stimulus package. According to Carol Kong, currency strategist at Commonwealth Bank of Australia, the BOJ will likely avoid major policy shifts in the near term due to political sensitivities.
Market participants believe Prime Minister Sanae Takaichi’s preference for fiscal expansion and loose monetary policy could complicate the BOJ’s tightening path.
Meanwhile, global market sentiment was upbeat following a meeting between U.S. President Donald Trump and China’s President Xi Jinping in South Korea. Both leaders hinted that a U.S.-China trade deal could be finalized soon, lifting investor confidence. The dollar index steadied near a two-week high at 99.09, supported by hawkish remarks from the Fed.
The euro gained slightly to $1.1613, while sterling remained near a five-and-a-half-month low at $1.3202. The Fed’s 25-basis-point rate cut was offset by Chair Jerome Powell’s cautious comments, suggesting limited scope for further easing this year.
Elsewhere, the Australian and New Zealand dollars rose 0.2% each, buoyed by a stronger Chinese yuan, which hit a near one-year high at 7.0955 per dollar on optimism over Sino-U.S. trade progress.
