Yen Weakens Despite Hot Inflation as BOJ Policy Remains Cautious

The Japanese yen continued its decline against major currencies on Friday, despite domestic inflation accelerating and employment data coming in stronger than expected.

Data released earlier in the session showed that Japan's core consumer price index rose 2.8% year-on-year in January, exceeding the Bank of Japan's 2% target.

The unemployment rate fell to 2.4%, and the jobs-to-applicants ratio improved to 1.27, signaling robust labor demand.

However, investors focused instead on the widening yield gap between Japanese government bonds and U.S. Treasuries, which continues to favor the dollar.