Japanese yen edged higher after the announcement of Japanese consumer inflation data.

The Japanese yen (JPY) bounced off its YTD low against the US dollar during the Asian session on Friday. Appearing to have ended an eight-day losing trend.

The uncertainty surrounding the BoJ’s next policy measures limits any major upside.

The rise, however, lacks bullish confidence or follow through buying in the face of uncertainties. About the Bank of Japan’s (BoJ) future policy measures. Aside from that the existing risk-on environment limits the upside for the safe-haven JPY.

The US Dollar (USD), on the other hand, gains upward traction for the second straight day. Building on an overnight rebound from a one week low amid optimism about US economic growth. This, in turn, could operate as a tailwind for the USDJPY pair. Albeit the gain is likely to be limited given expectations that Japanese authorities will interfere in the markets to support the domestic currency.

Daily Market Movers: Japanese Yen struggles to gain serious traction under BoJ policy uncertainty.

The Japan Consumer Price Index increased from 2.2% YoY to 2.8% in February. And is still significantly above the Bank of Japan’s 2% objective, offering some support to the Japanese yen on the last Day of the week.
The Core CPI, which excludes volatile fresh food prices. Increased dramatically from 2% annualized pace in January to 2.8% in the reporting month, generally in line with market expectations.
Meanwhile, the so-called “core core” index, which excludes fresh food and energy prices. Fell further from its 40-year peak in 2023 to 3.2% in February, down from 3.5% the previous month.
This follows a far stronger-than-anticipated wage raise by big Japanese corporations, which is projected to boost demand-driven inflation and allow the BoJ to tighten monetary policy even more.

Japan’s Finance Minister Shunichi Suzuki reaffirmed that the government is studying FX movements with a high level of urgency.

Japan’s Finance Minister Shunichi Suzuki reaffirmed that the government is studying FX movements with a high level of urgency. Currency exchange rates must fluctuate steadily and in accordance with fundamentals.
BoJ Governor Kazuo Ueda stated on Friday that the central bank’s Japanese government bond (JGB) holdings will continue at present levels for the time being, limiting any additional JPY increases.
Despite the Federal Reserve’s predicted three rate cuts this year, rising US Treasury bond rates helped the US Dollar regain upward momentum on Thursday and could strengthen the USDJPY pair.
The US Department of Labor (DOL) announced 210K Initial Jobless Claims for the week ending March 16, down from 212K the previous week but higher than the predicted 215K.
Market players are looking forward to Fed Chair Jerome Powell’s expected address later in the early North American session should provide some significant impetus and short-term trade opportunities.