Japanese Yen Slides After Surprise Current Account Deficit

The yen weakened broadly on Monday, falling 0.6% against the U.S. dollar to hover near 158.80 during European trading hours. The move came after Japan unexpectedly reported a current account deficit, defying forecasts for a surplus.

The deficit data heightened worries about Japan's external position, prompting traders to sell the yen versus major counterparts. Other yen crosses also registered losses, reflecting a wider negative sentiment on the currency.

While the dollar continued to benefit from higher-for-longer U.S. rate expectations, the yen's own fundamentals have come under scrutiny. The surprise deficit adds to the challenges facing the Bank of Japan as it navigates policy normalization.