Japanese Yen Continues its Recovery from Losses

The US dollar dropped by 0.2% against the Japanese yen to 145.02, after recovering sharply against the dollar.

The markets continue to anticipate that the Bank of Japan will maintain its extremely cautious stance later this month.

The dollar index, which tracks the US currency against a basket of six other currencies, remained steady at 102.022, falling from its highest level recorded on Thursday at 102.76. However, it is still significantly higher than the lowest level in five months at 100.61 in December.

The data showed that consumer prices in the United States rose by 0.3% in December, with an annual increase of 3.4%, exceeding expectations of a 0.2% and 3.2% increase respectively.

However, the dollar received little support from this, as the “core” consumer price index, which excludes volatile food and energy prices, once again decreased, indicating that inflation remains in decline.

Officials at the Federal Reserve Bank attempt to decrease the likelihood of early interest rate cuts, as President of the Federal Reserve Bank of Cleveland, Loretta Mester, stated on Thursday that the latest consumer price index figures suggest it may be premature for the central bank to lower interest rates in March.

However, the majority of traders still anticipate that the Federal Reserve will initiate a reduction in interest rates in the month of March.