Japanese Yen Firms as Tokyo Core Inflation Hits 2.7%

Tokyo core inflation rose to 2.7% in October, causing the Japanese Yen to firm up against its major peers. This move was unexpected, given that traders had reduced their bets on an interest rate hike by half after the Bank of Japan's meeting summary a day earlier.

Despite this, the USD/JPY pair fell back below 158.00 immediately after the inflation data release at 23:30 GMT and stayed above 157.50. The pair is now near the middle of Thursday's range, which ran from above 157.00 to just short of 158.50.

The Bank of Japan's ultra-loose monetary policy between 2013 and 2024 had caused the Yen to depreciate against its main currency peers due to increasing policy divergence with other major central banks. However, the recent gradual unwinding of this policy has given some support to the Yen.