The Japanese yen weakened to around 151.5 per dollar on Thursday, likely due to a technical correction after reaching its highest level in over five weeks the previous session.
Japanese yen holds near five-week highs
The recent rally was driven by speculation that the Bank of Japan may raise interest rates as soon as next month. BOJ Governor Kazuo Ueda recently suggested the possibility of a rate hike in December, citing concerns about the yen’s weakness. Markets are now pricing in a roughly 60% chance of a 25 basis point rate increase in Japan next month, up from around 50% just a week ago.
Focus on Tokyo's inflation
Investors are also awaiting Tokyo's inflation data, due on Friday, which could offer further insights into the future direction of BOJ policy. Additionally, the yen found support from a broad decline in the US dollar, as US PCE inflation data met expectations, signaling little change in the Federal Reserve's stance on rate cuts.
