JPY Gains on Tokyo Core CPI Data, BoJ Rate Hike Chances Rise

The Japanese Yen strengthened against the US Dollar in early Asian trading on Friday, as Tokyo's core Consumer Price Index (CPI) inflation data suggested a higher chance of a Bank of Japan rate hike in September.

Data from the Statistics Bureau of Japan showed that the headline Tokyo CPI rose 1.9% year-over-year (YoY) in August, compared to 1.8% in July. The core CPI inflation climbed to 1.8% YoY in August from 1.7% in July.

The Bank of Japan's Deputy Governor Himino struck a hawkish tone without explicitly signaling a rate hike next month. Analysts at MUFG noted that while Himino stopped short of an explicit signal, his general tone was certainly on the hawkish side.