Japan’s inflation picked up more than expected in January, with core consumer prices excluding fresh food rising 3.2% year-on-year, marking the sharpest gain since June 2023. The data reinforced expectations for a policy shift from the Bank of Japan, with traders now pricing in an 84% probability of a 25-basis-point hike by July, up from 70% at the start of the month.
Despite the inflationary pressure, the yen weakened past the 150-per-dollar mark after briefly strengthening on Thursday amid speculation of a BOJ rate increase. Comments from Governor Kazuo Ueda tempered some of the hawkish sentiment, as he reaffirmed the central bank’s commitment to ensuring market stability. The yen fell against all of its G-10 counterparts, with traders reassessing the timing and magnitude of any policy tightening.
Crude Surges on Supply Uncertainty, Gold Holds Firm
Oil was poised for its strongest weekly gain since early January as concerns over supply disruptions fueled buying momentum. Meanwhile, gold remained near record levels, heading for an eighth consecutive weekly advance as geopolitical and trade uncertainties underpinned demand for safe-haven assets.