USD/JPY weakens below 142.50 as Japanese CPI hits 3.6% YoY in March
The USD/JPY pair weakened near 142.25 in a thin trading session on Friday (4/18). The US Dollar (USD) weakened against the Japanese Yen (JPY) amid concerns over the impact of tariffs on the economy.
Data released by the Statistics Bureau of Japan on Friday showed that the National Consumer Price Index (CPI) rose by 3.6% YoY in March, compared to the previous reading of 3.7%. Meanwhile, the National CPI ex-fresh food came in at 3.2% YoY in March compared to 3.0% previously. The reading was in line with market consensus.
Lastly, the CPI ex-fresh food, energy rose by 2.9% YoY in March, compared to the previous reading of 2.6%. The Japanese Yen remained strong against the Greenback in direct reaction to the Japanese inflation data. However, JPY’s gains may be limited as Bank of Japan (BOJ) officials signaled a pause in considering interest rate hikes, stressing the need to monitor the heightened uncertainty stemming from US tariff actions. BOJ Governor Kazuo Ueda said on Thursday, “We will carefully assess the economy and inflation for appropriate policy decisions by paying close attention to the heightened uncertainty stemming from US tariff actions and other issues.”
Fellow board member Junko Nakagawa echoed Ueda’s view in a separate statement, saying that it was necessary to monitor developments with high vigilance. Japanese Finance Minister Katsunobu Kato is expected to meet separately with Finance Minister Scott Bessent to continue negotiations initiated by Prime Minister Shigeru Ishiba’s top tariff negotiator Ryosei Akazawa. Investors will be watching developments in the country-specific trade talks.
US economic data on Thursday was mixed. US Initial Jobless Claims fell to a two-month low, signaling a stable labor market. Also, the Philadelphia Fed Index fell, missing estimates, a warning of a manufacturing sector slowdown.
Source: FXStreet
