Japan's CPI Spikes, USD/JPY Rises Amidst BoJ Policy Shift

Economics News

Japan's CPI Spikes, USD/JPY Rises Amidst BoJ Policy Shift
JAPANESE YENCPIBANK OF JAPAN
  • 📰 FXStreetNews
  • ⏱ Reading Time:
  • 96 sec. here
  • 10 min. at publisher
  • 📊 Quality Score:
  • News: 66%
  • Publisher: 72%

Japan's National Consumer Price Index (CPI) showed a significant increase in December, reaching 3.6% YoY. This rise, coupled with the Bank of Japan's (BoJ) gradual shift away from its ultra-loose monetary policy, has led to fluctuations in the USD/JPY exchange rate. The text delves into the factors driving the Japanese Yen's value, including BoJ policy decisions, yield differentials with US bonds, and global risk sentiment.

Japan's National Consumer Price Index ( CPI ) surged 3.6% year-on-year (YoY) in December, marking a significant increase from the previous reading of 2.9%, according to data released by the Japan Statistics Bureau on Friday. Further details reveal that the National CPI excluding fresh food reached 3.0% YoY in December, up from 2.7% previously. This figure aligned with market expectations of 3.0%. The CPI excluding fresh food and energy rose 2.

4% YoY in December, unchanged from the revised figure of 2.4% (previously reported at 2.7%).In response to Japan's CPI inflation data, the USD/JPY pair climbed 0.08% on the day to 156.09.The Japanese Yen (JPY) is one of the world's most traded currencies, with its value influenced primarily by the performance of the Japanese economy. More specifically, the Bank of Japan's (BoJ) monetary policy, the yield differential between Japanese and US bonds, and overall risk sentiment among traders play a crucial role.The BoJ has a mandate for currency control, making its actions a significant factor for the Yen. While the BoJ has occasionally intervened in currency markets to weaken the Yen, it tends to avoid frequent interventions due to political considerations with its major trading partners. The BoJ's ultra-loose monetary policy between 2013 and 2024 led to a depreciation of the Yen against its main currency counterparts as a result of the widening policy divergence with other major central banks. Recently, the gradual unwinding of this ultra-loose policy has provided some support to the Yen.The widening policy divergence between the BoJ and other central banks, particularly the US Federal Reserve, during the decade of ultra-loose monetary policy has resulted in a widening yield differential between 10-year US and Japanese bonds. This has generally favored the US Dollar against the Japanese Yen. The BoJ's decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts by other major central banks, is contributing to a narrowing of this yield differential.The Japanese Yen is often viewed as a safe-haven asset. During periods of market stress, investors tend to seek refuge in the Yen due to its perceived reliability and stability. Turbulent times are likely to strengthen the Yen's value against other currencies considered riskier investments.

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

FXStreetNews /  🏆 14. in US

JAPANESE YEN CPI BANK OF JAPAN MONETARY POLICY USD/JPY BOND YIELDS RISK SENTIMENT

United States Latest News, United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

USD/JPY Declines Amidst BoJ Rate Hike Speculation and Weakening US DollarUSD/JPY Declines Amidst BoJ Rate Hike Speculation and Weakening US DollarThe USD/JPY currency pair is experiencing a downward trend, influenced by market anticipation of a potential interest rate increase by the Bank of Japan (BoJ) and a weakening US Dollar. Traders are closely monitoring recent inflation data from Tokyo, which suggests a possibility of BoJ action in January, leading to a stronger Japanese Yen.
Read more »

USD/JPY Hovers Near Highs as BOJ Governor Hints at Rate HikeUSD/JPY Hovers Near Highs as BOJ Governor Hints at Rate HikeThe US Dollar against the Japanese Yen (USD/JPY) continues to trade near recent highs, despite the Bank of Japan's (BOJ) reluctance to signal a concrete timeline for rate hikes. BOJ Governor Ueda emphasized that a policy rate increase is possible if economic conditions improve throughout the year.
Read more »

USD/JPY Consolidates Near Highs as Investors Await Fed and BOJ MovesUSD/JPY Consolidates Near Highs as Investors Await Fed and BOJ MovesThe USD/JPY pair remains near recent highs as markets anticipate upcoming policy decisions from both the Federal Reserve and the Bank of Japan. While the Fed is expected to continue cutting rates, the BoJ is poised to begin raising rates, creating uncertainty for investors. Key economic data releases, including the FOMC minutes and the US NFP report, will be closely watched for further clues.
Read more »

USD/JPY Dips on BoJ Hike ExpectationsUSD/JPY Dips on BoJ Hike ExpectationsUSD/JPY trades lower as markets anticipate a 22bp hike from the Bank of Japan (BoJ) next week. BoJ officials' comments and media reports suggest a high likelihood of a rate increase, citing positive wage growth and a favorable economic outlook. Risks remain skewed to the downside with support levels identified at 154.80, 154.30, and 152.80.
Read more »

USD/JPY Dips Ahead of Trump Inauguration as BoJ Rate Hike Speculation MountsUSD/JPY Dips Ahead of Trump Inauguration as BoJ Rate Hike Speculation MountsThe Japanese Yen strengthened against the US Dollar on Monday, driven by speculation of a Bank of Japan rate hike. However, the potential impact of Trump's inauguration and its effect on US monetary policy adds uncertainty to the outlook for USD/JPY.
Read more »

USD/JPY Volatility: Trump Policies and BOJ Meeting Loom LargeUSD/JPY Volatility: Trump Policies and BOJ Meeting Loom LargeThe interplay of Trump's economic agenda and the BOJ's potential interest rate hike could trigger significant market swings for the USD/JPY currency pair.
Read more »



Render Time: 2025-02-12 22:04:57