Japanese Yen (JPY) edged lower during the Asian session on Friday as hopes for the potential de-escalation of the US-China trade standoff remaining supportive of a positive risk tone and tempering demand for traditional safe-haven assets. Apart from this, a modest US Dollar (USD) uptick helps the USD/JPY pair to climb back above the 143.00 mark and reverse a part of the previous day's pullback from a nearly two-week high.

Meanwhile, government data showed that consumer inflation in Tokyo Japan's capital city accelerated sharply in April and reaffirmed market bets for more interest rate hikes by the Bank of Japan (BoJ). In contrast, Federal Reserve (Fed) officials showed willingness for potential interest rate cuts. This, in turn, might keep a lid on any meaningful upside for the USD and help limit deeper losses for the lower-yielding JPY.
The conflicting statements underscore the uncertainty around the current trade war, which might continue to infuse volatility in the global financial markets and act as a tailwind for safe-haven assets. Furthermore, the prospects for additional interest rate hikes by the Bank of Japan should limit deeper losses for the JPY.
Data released earlier this Friday showed that the Tokyo Consumer Price Index (CPI) grew 3.5% year-on-year in April from 2.9% in the previous month. Adding to this, Tokyo core CPI, which excludes volatile fresh food prices, rose 3.4% YoY, or a two-year high, compared to the 3.2% expected and sharply higher than the 2.4% in March.
Furthermore, a gauge that excludes both fresh food and fuel costs and is closely watched by the BoJ rose 3.1% in April from a year earlier after a 2.2% rise in the previous month. This points to broadening inflation in Japan and gives the BOJ headroom to raise interest rates further after a 50 basis point rate hike earlier this year.(Cay)

Sumber: Fxstreet