Japanese Yen bulls have the upper hand amid rising BoJ rate-hike bets
The Japanese Yen (JPY) ticked higher on Friday following the release of hotter consumer inflation figures from Japan, which keeps the door open for more interest rate hikes by the Bank of Japan (BoJ).
Investors, however, seem convinced that policymakers will assess tariffs and trade flows before making their next move. Nevertheless, this still marks a big divergence in comparison to bets that the Federal Reserve (Fed) will lower borrowing costs again in 2025. This further contributes to the JPY's outperformance against its American counterpart.
Meanwhile, US-Japan trade negotiations appear to be progressing as officials continue to meet regularly. In fact, Japan’s top tariff negotiator Ryosei Akazawa intends to visit the US around May 30 for another round of talks with the Trump administration.
This raises hopes for an early trade deal and is seen as another factor lending support to the JPY. Adding to this, the emergence of fresh US Dollar (USD) selling fails to assist the USD/JPY pair to capitalize on the previous day's goodish rebound from the 142.80 region, or over a two-week low.
Source: Fxstreet
