The USD/JPY pair shows slight upward movement around 158.45 in the early hours of the Asian session on Friday. The Japanese Yen experiences a decline against the US Dollar after the publication of Japanese inflation data. The focus will be on the Bank of Japan interest rate decision and the subsequent press conference scheduled for later on Friday. The USD/JPY pair is experiencing slight upward movement, currently positioned at 158.45 during the early Asian trading session on Friday. In December, Japan’s National CPI increased by 2.1% year-over-year, while the Core CPI rose as anticipated. The BoJ interest rate decision will be the focal point on Friday, with no alterations in the rate anticipated.
On Friday, data indicated that Japan’s National Consumer Price Index experienced a year-over-year increase of 2.1% in December, a decline from the prior reading of 2.9%. This figure marked its lowest point since March 2022. Meanwhile, the National CPI excluding Fresh food registered at 2.4% year-over-year in December compared to 3.0% previously. The figure aligned with market expectations and marked its lowest point since October 2024.
The CPI excluding Fresh Food and Energy increased by 2.9% year-over-year in December, a slight decrease from the prior reading of 3.0%. The Japanese Yen experiences a modest decline against the Greenback following the release of the softer inflation report. Indicators of easing inflation may reduce the necessity for the Bank of Japan to increase interest rates any further.
However, the BoJ is anticipated to maintain its policy rate at approximately 0.75% at the end of its two-day meeting on Friday. The Japanese central bank increased its rate to the highest level in three decades in December 2025. Market participants are closely monitoring the upcoming press conference by Governor Kazuo Ueda for insights on the anticipated timing of the Bank of Japan’s next interest rate increase.