Yen Strengthens, BOJ Poised for Further Rate Hikes
The Japanese yen strengthened past 155 per dollar on Friday, poised for a solid weekly gain. This came after investors expected the Bank of Japan (BOJ) to continue raising interest rates despite weaker-than-expected Tokyo inflation data. Annual inflation in Tokyo fell to 2% in December, its lowest level in more than a year, mainly due to lower food and energy prices. This data is closely watched as it is considered a leading indicator of national inflation trends.
Last week, the BOJ raised its policy rate to 0.75%, its highest level since 1995. Governor Kazuo Ueda signaled that the BOJ is prepared to raise further if inflation remains high. Despite these signals for policy tightening, the yen remains near its lows recorded in January, prompting BOJ officials to warn of possible market intervention.
Meanwhile, Japanese industrial production fell 2.1% annually in November, although retail sales rose 1% and the unemployment rate remained stable at 2.6%. This situation indicates that the Japanese economy still faces challenges despite tighter monetary policy. Investors and policymakers are now monitoring whether the yen can continue to strengthen or whether further action will be taken by the BOJ. (az)
Source: Newsmaker.id
