FX.co ★ Japanese Yen Rebounds Amid Inflation Data

The Japanese yen appreciated to approximately 148 per dollar on Friday, recovering from a notable decline in the prior trading session. This shift occurred as investors assessed the latest inflation figures. Headline inflation eased to 3.3% in June 2025, down from 3.5% in May. Nevertheless, this marked the 39th consecutive month inflation stayed above the Bank of Japan's 2% target. Such persistent inflation has strengthened the belief that the Bank of Japan might contemplate tightening its monetary policy. Concurrently, data released on Wednesday revealed that Japan's trade surplus contracted in June, failing to meet projections as exports decreased for the second consecutive month, and imports rose slightly. These developments arise amid ongoing worries regarding Japan's economic prospects, particularly as trade tensions intensify. Japan is now confronting a new 25% U.S. tariff on goods, scheduled for implementation on August 1, adding to the existing 25% levy on automobiles—Japan's primary export to the U.S. Moreover, Japan is preparing for an Upper House election on July 20.