22.08.202502:19:34UTC+00Japanese Yen Weakens After Inflation Data

The Japanese yen declined to approximately 145.5 per dollar on Friday, marking its weakest position in three weeks as market participants assessed the latest inflation figures. In July 2025, the core Consumer Price Index (CPI) increased by 3.1% compared to the previous year, slightly down from June's 3.3% but surpassing market forecasts of 3%. This figure remained well above the Bank of Japan's desired target of 2%, reinforcing speculation about a potential shift in monetary policy. Analysts anticipate that core inflation will persist above 3% for a considerable time, strengthening the prospect that the Bank of Japan (BOJ) could consider an interest rate hike as early as October. During its July meeting, the central bank adjusted its inflation outlook upward and indicated a willingness to contemplate a rate increase by the end of the year. Nevertheless, Governor Kazuo Ueda has exercised caution, emphasizing that "underlying inflation" has yet to consistently align with the 2% target. Additionally, the yen faced external pressure from a robust US dollar, as markets awaited Federal Reserve Chair Jerome Powell's remarks at the Jackson Hole symposium, where he might counter expectations of an imminent rate cut.