Yen Tumbles to New Lows as US Dollar Gains Momentum

The Japanese Yen has continued its decline against the US Dollar, reaching levels not seen in some time. The USD/JPY pair rose by 0.14% on Friday and is currently trading around 159.60, a fifth consecutive day of gains.

Despite positive data from Japan, including inflation and employment figures, the Yen remains under pressure due to expectations of further monetary tightening by the Bank of Japan (BoJ). The Tokyo Consumer Price Index eased to 1.9% YoY in August, down from 2% in July, but core inflation accelerated to 1.8%, beating market expectations.

This acceleration brings underlying inflation closer to the BoJ's target of 2%, and comments from BoJ Deputy Governor Ryozo Himino have reinforced this view. Himino warned about persistent inflationary pressures and argued for timely interest rate hikes to avoid more aggressive tightening later.