The Japanese yen strengthened past 157 per dollar on Friday, following data that showed Japan's headline inflation rate climbed to a three-month high of 2.9% in November, up from 2.3% in October.
Yen gains strength against dollar
The core inflation rate also rose to 2.7%, exceeding market expectations of 2.6%. These figures reinforced expectations of a more hawkish stance from the Bank of Japan. However, the central bank decided to keep rates unchanged at its December meeting, citing the need to evaluate wage trends, global economic uncertainties, and the policies of the incoming US administration.
BoJ move hit the Japanese currency
The BOJ's decision led to a sharp depreciation of the yen, which fell nearly 2% to a five-month low on Thursday. Additionally, the yen faced pressure from a strong US dollar, after the Federal Reserve implemented a widely anticipated 25 basis point rate cut on Wednesday and signaled fewer rate cuts for 2025.
