Yen Stagnates Near Multi-Decade Low Amid Tokyo CPI Data

The Japanese yen remains near its weakest level in decades against the US dollar, after Tokyo's consumer price index (CPI) data for March showed a slight increase but failed to provide a clear direction for traders. The USD/JPY pair traded around 151.50 on Friday, as markets digested the core inflation reading of 2.4% year-on-year in March, which was marginally above expectations.

The Bank of Japan's (BOJ) 2% target remains elusive, with the headline CPI figure coming in at 2.6%, decelerating from 2.8% in February. The data did not offer the kind of upside surprise that would force a reassessment of the BOJ's ultra-loose monetary policy stance.

The primary driver of the yen's persistent weakness remains the wide interest rate differential between Japan and the United States, with US rates standing at 5.25% to 5.50%. The BOJ only recently ended its negative interest rate policy in March, raising its short-term rate to a range of 0.0% to 0.1%, leaving it significantly lower than US rates.