FX.co ★ Japanese Yen Falls on Dollar Strength

The Japanese yen fell beyond 157 per US dollar on Friday, marking its fourth consecutive decline. This devaluation was primarily due to the strong performance of the dollar, as investors processed a range of US economic reports and evaluated the future policy direction of the Federal Reserve. The yen's weakening occurred even though Japan showed positive domestic economic signs, including a 2.9% rise in household spending for November, driven by seasonal winter purchases and a reduction in inflationary pressure. Nonetheless, real wages decreased by 2.8% during the month as inflation outstripped wage growth, posing a challenge to the Bank of Japan's intentions for further monetary tightening. Earlier in the week, Governor Kazuo Ueda emphasized that the central bank is prepared to continue raising interest rates, provided that economic circumstances and inflation trends follow projections, indicating a balanced yet adaptable approach to its monetary policy.