FX.co ★ Yen Extends Slide Despite Faster Inflation

As of Friday, the Japanese yen edged closer to 153 per U.S. dollar and was on pace to depreciate by roughly 1.5% within the week. This decline occurred despite a rise in Japan’s core inflation figures for September, marking the first increase since May. Both headline and core inflation rates climbed to 2.9% from August's 2.7%, largely propelled by escalating electricity costs. Meanwhile, the steep rice inflation witnessed earlier this year drastically decreased to 49.2% from 69.7%. This economic data precedes the Bank of Japan's policy meeting scheduled for next week. The central bank is anticipated to maintain its current interest rates, with markets deferring expectations for the next rate hike to at least December, though most forecasts suggest it will occur early next year. Additionally, there is growing speculation that the newly appointed Prime Minister, Sanae Takaichi, will unveil a substantial stimulus package, possibly exceeding last year’s 13.9 trillion yen initiative designed to alleviate inflationary pressures on households.