FX.co ★ Japanese Yen Gains on Hot Inflation Data

The Japanese yen appreciated to approximately 143.6 against the US dollar on Friday, poised to gain over 1% for the week, driven by unexpectedly high inflation figures. Japan's core inflation rate surged to 3.5%, marking its highest in more than two years, which bolsters the forecast that the Bank of Japan will maintain its trajectory toward tighter monetary policy amid persistent inflation pressures. Concurrently, the headline inflation rate remained steady at 3.6%. The yen's rise was further supported by a generally weaker dollar, amid concerns over the US fiscal situation. In other developments, Japanese Finance Minister Katsunobu Kato recently stated that he did not engage in discussions regarding exchange rate levels with US Treasury Secretary Scott Bessent during the G7 meetings in Canada, thereby tempering expectations of any coordinated currency intervention.