The persistent weakness in Japan's economic activity could further undermine investor confidence in yen-denominated assets, raising concerns about the overall health of the Japanese economy.
While a weaker yen may enhance export competitiveness, it also poses risks by increasing import costs and exacerbating inflation, creating a mixed outlook for economic growth.
Recent comments from BoJ Governor Kazuo Ueda have raised concerns about the timing of any potential monetary tightening, contributing to the yen's decline against the stronger dollar.
The decline in Japan's industrial production, which fell by 3.3% month-over-month in August, intensifies the downward pressure on the yen.
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