Japanese Yen bulls remain on the sidelines despite strong Japan’s National CPI print

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The Japanese Yen adds to the post-BoJ losses and drops to a five-month low against the USD. The Fed’s hawkish shift remains supportive of elevated US bond yields and undermines the JPY. A stronger-than-expected Japan’s National CPI keeps the door open for a BoJ rate hike in 2025. The Japanese Yen (JPY) prolongs a two-week-old downtrend and hits a five-month low against its American counterpart during the Asian session on Friday. The Bank of Japan (BoJ) kept rates steady in a nearly unanimous vote on Thursday and flagged a cautious outlook for 2025 amid sluggish economic growth, which, in turn, is seen weighing on the JPY. Moreover, the widening US-Japan bond yield differential contributes to driving flows away from the lower-yielding JPY.  Meanwhile, the Federal Reserve’s (Fed) hawkish signal that it would slow the pace of rate cuts in 2025 helps the US Dollar (USD) to preserve its strong weekly gains to a two-year top. This further fuels the USD/JPY pair’s strong move-up to the 158.00 neighborhood. However, data showing that the Japanese Consumer Price Index (CPI) grew slightly more than expected in November, which could push the BoJ to raise interest rates early in 2025, provides some respite to the JPY bulls.  Japanese Yen draws some support from higher-than-expected Japan’s National CPI print The Bank of Japan decided on Thursday to keep the short-term rate target unchanged in the range of 0.15%-0.25% and offered few clues on how soon it could push up borrowing costs. Data released by the Japan Statistics Bureau this Friday showed that the National Consumer Price Index (CPI) climbed 2.9% YoY in November, compared to the previous reading of 2.3%. Additional details of the report revealed that the National CPI ex Fresh food arrived at 2.7% YoY during the reported month versus 2.3% in October…