The Japanese yen strengthened to around 146 per dollar on Thursday, extending gains from the previous session as the US dollar lost momentum. Market sentiment turned cautious after US President Donald Trump slapped a 50% tariff on Brazilian imports starting August 1, citing unfair trade practices. Tensions rose further as US-Japan trade talks hit a roadblock, especially over Japan's rice market protections. Trump has also imposed a 25% tariff on Japanese goods, effective the same day, and confirmed there would be no deadline extension. On the domestic front, Japan's producer price index rose 2.9% year-on-year in June 2025, easing from a slightly revised 3.2% in May, reinforcing expectations of stable domestic cost pressures.

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