- The Japanese Yen (JPY) rose on Friday & across the week
- Tokyo inflation rose to 2.2%
- The US Dollar (USD) falls against its major peers
- USD volumes were light due to Thanksgiving
The US Dollar Japanese Yen (USD/JPY) exchange rate fell on Friday after modest gains on Thursday. The pair rose 0.29% in the previous session, settling on Thursday at 151.54. At 21:30 UTC USD/JPY trades -1.18% lower at 149.75 and is in a range of 149.46 to 151.55. The pair fell 3.22% across the week.
The Japanese yen rose on Friday to its strongest level in six weeks after Tokyo inflation data. The yen broke below the 150 per dollar threshold, marking its strongest weekly performance in four months, as traders ramped up expectations that the Bank of Japan will hike interest rates next month.
Tokyo inflation Rose to 2.2% in November, ahead of economists’ forecasts, recovering from 1.8% in October. This inflation is often considered a lead indicator for the nationwide inflation print.
The market is now pricing in a 60% chance of a 25 basis point rate hike to 0.5% in the December meeting, which marked the highest rate since 2008
The US Dollar is falling across the board on Friday. The US Dollar Index, which measures the greenback against a basket of major currencies, is falling to 105.74 at the time of writing, down 0.38%, after rising 0.06% yesterday. The USD fell 1.68% across the week after 8 weeks of gains.
The US dollar drifted lower on Friday in quiet trade owing to the Thanksgiving extended holiday.
The US dollar was on track to fall across the week in its first weekly decline in over two months. The US dollar had tracked treasury yields lower following Trump’s nomination of Scott Bessent as Treasury Secretary; he is considered an old hand at Wall Street and is hoped will moderate Trump’s inflationary policies.
Looking ahead, attention will turn to next week’s nonfarm payroll data, and I assume services activity data, for further clues about the health of the US economy and the likelihood of a rate cut by the Fed later this month.
