26.12.202500:49:21UTC+00Yen Heads for Solid Weekly Gains

On Friday, the Japanese yen appreciated beyond the 155 mark against the US dollar, en route to robust weekly gains. This movement comes as investors predict that the Bank of Japan will continue its interest rate hikes, even though Tokyo has reported lower-than-expected inflation figures. The annual inflation rate in the capital reduced to 2% in December, marking the lowest level in over a year and indicating a decrease in food and energy cost pressures. Analysts and market participants often regard Tokyo's inflation data as a precursor to nationwide trends, making it a focal point for policymakers. In the previous week, the Bank of Japan raised its policy interest rate to 0.75%, the most significant increase since 1995. Governor Kazuo Ueda has suggested that further hikes could be on the horizon if inflation remains persistent. Nevertheless, despite Ueda's indications, the yen hovers close to its January lows, leading to official warnings about potential market interventions. In other economic developments, Japan's industrial output saw a 2.1% decline year-on-year in November, retail sales experienced a modest 1% rise, and the unemployment rate stayed constant at 2.6%.