Japanese Yen jumps to over one-month high against USD after Tokyo CPI release

The Japanese Yen rallied in reaction as a stronger Tokyo CPI lifted BoJ rate hike bets.

The USD languishes near a two-week low and contributes to USD/JPY’s decline.

The technical setup backs prospects for a further decline infr the major currency pair.

The Japanese Yen (JPY) strengthens across the board following the release of strong November consumer inflation figures from Tokyo, Japan’s capital, which backs the case for another Bank of Japan (BoJ) interest rate hike in December. Apart from this, geopolitical risks stemming from the Russia-Ukraine war, concerns about US President-elect Donald Trump's tariff plans and a slight deterioration in the global risk sentiment drive haven flows towards the JPY. 

Meanwhile, the recent downfall in the US Treasury bond yields, which followed Scott Bessent's nomination as the US Treasury secretary, turns out to be another factor benefiting the lower-yielding JPY. The US Dollar (USD), on the other hand, languishes near a two-week low amid bets that the Federal Reserve (Fed) will cut rates in December and contributes to the USD/JPY pair's slide below the 150.00 psychological mark or the lowest level since October 21.