Ella 
The Japanese yen (JPY) ended its recent losses on Thursday, spurred by comments from Seiji Adachi, a member of the Bank of Japan (BOJ) board of directors, on Wednesday. Adachi stressed that bond purchases will be gradually reduced to ensure that long-term yields accurately reflect market signals. In addition, he also said that if the weakening yen leads to higher inflation, then raising interest rates may be appropriate, according to Reuters.
Traders have increased their bets on another rate hike by the Bank of Japan (BoJ). Investors are now turning their attention to Tokyo inflation data due on Friday, which is seen as a key indicator of price trends across the country.
Hawkish comments from Minneapolis Fed President Neel Kashkari further fueled market concerns about potential rate hikes, keeping the yield gap between the United States and Japan widening. This environment continues to fuel the yen carry trade, where investors use low-yielding yen to invest in higher-yielding dollar assets.
The dollar strengthened on rising U.S. Treasury yields, partly due to increased risk aversion ahead of the release of U.S. first-quarter annualized GDP data on Thursday. Additionally, market participants are likely to watch data on the core personal consumption expenditures (PCE) price index scheduled for release on Friday, which is expected to provide insight into the Federal Reserve’s potential stance on interest rate adjustments.
