Yen Fights Back Against Dollar Strength

The yen's recent losses are being partially recouped, thanks to Tokyo inflation data that exceeded expectations. Core inflation accelerated to 2.7% in September, exceeding the Bank of Japan's 2% target for the first time in nine months.

However, despite this positive news, the yen remains on track for a third consecutive weekly decline due to the strong US dollar and elevated US Treasury yields. The Federal Reserve's potential continued rate hikes are also weighing down the Japanese currency.

A technical analysis of the USD/JPY chart shows that the pair could see another corrective rise towards 158.75-158.99 resistance area, but as long as it remains below this level, a subsequent reversal lower is likely.