Ella 
On Friday, the Japanese yen continued to fall after weak national consumer price index (CPI) data released by the Statistics Bureau of Japan. Japan’s annual inflation rate fell to 2.5% in April from 2.7% the previous month, falling for a second straight month but still above the Bank of Japan’s 2% target. Persistent inflation has put pressure on the central bank to consider further tightening of policy.
The Bank of Japan emphasized that a virtuous cycle of sustained and stable achievement of the 2% price target while maintaining strong wage growth is crucial to normalizing policy. At the same time, investors expect continued weakness in the yen may force the Bank of Japan to advance a new round of interest rate hikes to mitigate the impact of rising living costs, Reuters reported.
The U.S. dollar (USD) moved higher on the Federal Reserve’s hawkish outlook for “higher interest rates for longer.” That sentiment was reinforced by Thursday’s U.S. purchasing managers’ index, which came in higher than expected.
