Japanese Yen Strengthens Amid Inflation Data, Rate Hike Speculation

The Japanese yen strengthened against major currencies following stronger-than-expected inflation data. This development has increased speculation about a potential interest rate hike by the Bank of Japan (BoJ) in July. The yen rose to multi-day highs against the euro, Swiss franc, pound, U.S. dollar, Australian dollar, Canadian dollar, and New Zealand dollar. Tokyo's core inflation rose to 3.6% annually in May, exceeding forecasts. This increase bolsters the likelihood of the BoJ raising interest rates by 25 basis points. Investors are closely watching these economic indicators for further clues about the central bank's monetary policy. Other Japanese economic data released included unemployment rate, industrial production, and retail sales. The unemployment rate remained steady at 2.5% in April. Industrial production declined by 0.9% month-on-month, while retail sales increased by 3.3% year-on-year.