The yen weakened after the Bank of Japan halved its economic-growth forecast, citing uncertainty around President Trump’s tariff war. The central bank expects growth of 0.5% in the 12 months ending next March.

The BoJ board cut its growth and inflation forecasts in its quarterly outlook report. The growth forecast for the fiscal year ending March 2026 was slashed to 0.5% from 1.1% in January and inflation is not expected to remain sustainable at 2% until the second half of 2026, a year later than in the January forecast.