The Japanese Yen rebounded from a two-year low against the US Dollar, as expectations of a Bank of Japan rate hike helped counterbalance Japan’s softer consumer price index data. The USD/JPY pair, which had reached 161.80 yen—a level not seen since July 2024—began to drift lower during Friday's Asian trading session.
According to FX Street, the USD/JPY extended its previous day’s late pullback from the 161.80 region before easing down. This movement reflects a market cautiously weighing the possibility of tighter monetary policy against the backdrop of subdued inflation figures.
For investors in Japan’s FX and equities markets, this development highlights the delicate balance between policy expectations and economic data as the Bank of Japan navigates its next steps amid evolving domestic and global conditions.