The yen strengthened against the U.S. dollar during Asian trading on Friday, following remarks from Japan’s new finance minister indicating that the government is closely monitoring foreign exchange movements with heightened urgency. The yen was last recorded at 0.1% stronger against the U.S. dollar, standing at 154.01 yen per dollar, recovering slightly from its lowest point in nearly nine months. This movement follows the release of government data on Friday indicating that core consumer prices in Tokyo increased by 2.8% in October compared to the same month last year. The unexpectedly high reading suggests that inflation continues to exceed targets in the Japanese capital, creating challenges for the Bank of Japan following its decision to maintain interest rates on Thursday.

“We’re reaching a stage where the weakness of the yen is increasingly capturing the attention of politicians,” stated Sim Moh Siong. The yen has depreciated by 4% against the dollar over the last month, marking its most significant monthly decline since July, and it is currently approaching a record low in relation to the euro. The U.S. dollar maintained its position in Asia on Friday following a three-month peak on Thursday, as market participants evaluated the mixed signals stemming from this week’s central bank decisions, earnings reports from the tech sector, and a tentative agreement on tariffs between the U.S. and China.

The dollar index, which gauges the strength of the greenback against a basket of six currencies, remained stable at 99.469 following stock market losses that unsettled global markets on Thursday. “Risk aversion favours the dollar,” stated Rodrigo Catril. “The Fed remains uncertain about the possibility of further cuts,” he added. “The current yen weakness, driven by the actions of the BOJ, is not beneficial.” Japanese Finance Minister Satsuki Katayama stated on Thursday that she would not uphold her previous comments made in March, which indicated that the yen’s real value is nearer to 120-130 per dollar, referencing her current role as the minister responsible for currency policy.

Market participants have reduced their expectations for a rate cut by the Federal Reserve at the upcoming policy meeting scheduled for December 10. The probability of a 25-basis-point cut in Fed funds futures stands at 74.7%, a decrease from the 91.1% chance noted a week prior. The yield on the U.S. 10-year Treasury bond reached approximately a three-week high of 4.0989%, reflecting an increase of 0.59 basis points from the prior close of 4.093%. The euro strengthened by 0.1% to $1.1572 following the European Central Bank’s decision to maintain interest rates at 2% for the third consecutive meeting on Thursday. The U.S. dollar remained stable at 7.111 yuan against the offshore Chinese yuan, while sterling held at $1.31555 and the Australian dollar slipped 0.1% to $0.65495, with the kiwi dollar down 0.2% at $0.57325.