The yen jumped by about 1.2% against the US dollar to a six-week high on Friday, breaking the 150 yen levels as on the chart, as core inflation in Tokyo jumped to 2.2% from 1.8%, rising inflation is likely to support the view on an imminent increase in interest rates for interest rates by the Central Bank of Japan next month.
However, the US dollar fell against most major currencies in weak trading due to the Thanksgiving holiday in the United States, as the British pound, the New Zealand dollar and the Chinese yuan rose to their strongest levels in more than a week.
Falling US Treasury yields also exacerbated the dollar's declines, while the Japanese currency strengthened thanks to safe-haven flows amid Trump's warnings of large-scale tariffs on Mexico, Canada and China this week, and by increasing bets that the Bank of Japan will raise interest rates again next month.
The markets are currently pricing in a 57% probability of a further Japanese interest rate hike of 25 basis points on December 19 next.
