FX.co ★ Japanese Yen Muted After Inflation Data

The Japanese yen remained steady at approximately 142.3 per dollar on Friday, staying close to its highest level in seven months as investors evaluated recent inflation figures. Official data indicated that Japan's headline inflation reduced to a four-month low of 3.6% in March, while core inflation increased to 3.2%, aligning with forecasts. The market's attention now turns to the upcoming Bank of Japan policy meeting, where it is generally anticipated that the central bank will keep interest rates unchanged at 0.5%. Nevertheless, there is speculation policymakers may lower growth projections due to escalating concerns about the effects of US tariffs on Japan's export-dependent economy. Despite the expectation that the BOJ will maintain a gradual approach to tightening this year—largely influenced by persistently high food prices and rising wages—the external trade environment continues to present uncertainties for its monetary policies. Simultaneously, Japanese Finance Minister Kato addressed issues surrounding the currency, affirming that Japan is not engaging in actions to manipulate the foreign exchange market to depreciate the yen.