USD/JPY Surges Above 159.50 as Yen Continues Downward Trend

The Japanese Yen continued its downward trend against the US Dollar on Friday, marking its fifth consecutive day of losses. Despite rising inflationary levels and a surprise drop in the Unemployment Rate to 2.4% in July, the USD/JPY pair reached fresh weekly highs above 159.50.

The Tokyo Consumer Price Index (CPI) eased to 1.9% year-over-year (Y-o-Y) in August from 2% in July, but the Core CPI accelerated to 1.8% Y-o-Y in August, beating market forecasts of a steady 1.7% rate and approaching the Bank of Japan's (BoJ) 2% target.

BoJ Deputy Governor Ryozo Himino warned about mounting inflationary pressures, calling for timely interest rate hikes to avoid abrupt increases later if consumer prices get out of control.