Yen hits six-week high, dollar dips for month-end
The yen jumped to a six-week high against the dollar on Friday after faster-than-expected inflation in Tokyo supported bets for a Bank of Japan interest rate hike next month.
Tokyo's core consumer price index, which excludes volatile fresh food costs, rose 2.2% year-on-year in November from a year earlier, up from 1.8% last month and beating forecasts for a 2.1% gain.
Trading volumes declined heading into the U.S. Thanksgiving holiday on Thursday, with many traders still out on Friday.
The dollar was last down 1.04% at 149.97 yen , and earlier dipped to 149.53 yen for the first time since Oct. 21. It is set for a 2.1% weekly loss against the Japanese currency, the largest since September.
The dollar index was last down 0.04% at 106.03, after earlier reaching 105.61, the lowest since Nov. 12.
Traders are pricing in 66% odds for a 25 basis point cut at the Fed's Dec. 17-18 meeting, but only a 17% chance of an additional reduction in January, according to the CME Group’s FedWatch Tool.
The euro fell 0.05% to $1.0548. The single currency has tumbled about 3% in November as the dollar has rallied, putting it on course for its worst month since April 2022.
Data on Friday showed that French consumer prices grew in line with expectations in November. Germany’s inflation report on Thursday showed price pressures remaining flat in November despite expectations of a second consecutive increase.
