The USD/JPY pair fell over 0.5% to trade in the 156.70s on Thursday. The Japanese Yen saw increased demand as a safe-haven asset, while the US Dollar took a break from its recent rally. Bank of Japan official Seiji Adachi suggested that higher interest rates could help strengthen the historically weak Yen. Despite mixed inflation data, investors still anticipate the BoJ raising rates. Rising Japanese Government Bond yields further supported the Yen, while US 10-year yields dipped to 4.59% after Wednesday’s gains. The Fed Beige Book report painted a positive picture of the US economy and hinted at higher interest rates. Traders are betting on a BoJ rate hike, despite Japan’s inflation slowing down. The Corporate Service Price Index in Japan showed a strong increase in April. Attention now turns to Tokyo’s inflation data to gauge nationwide price trends. Minneapolis Fed President Neel Kashkari mentioned the possibility of interest rate hikes by the Fed in the future.
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