JPY rose against other major currencies in the European session on Friday as investors weighed the latest remarks from Japan’s finance minister Katsunobu Kato, the December opinions of the Bank of Japan’s (BoJ) policymakers, and a batch of economic data from Japan.
Mr. Kato noted that the country’s government "has been alarmed by foreign exchange developments” . He also pledged to take “appropriate action against excessive moves.”
The summary of opinions at the BoJ’s December 18-19 meeting revealed that the policymakers discussed the possibility of a near-term interest rate hike. “The Bank will likely decide to raise the policy interest rate in the near future, but at this point, it is necessary for the Bank to be patient and monitor the uncertainties over the U.S. economy until those uncertainties subside,” the policymakers suggested.
Statistics Bureau of Japan informed that the consumer price index (CPI) in Tokyo Prefecture climbed to 3.0% YoY in December from 2.6% YoY in November. This was the highest inflation rate since October 2023 (3.2% YoY). Meanwhile, Tokyo's core CPI rose 2.4% YoY, accelerating from 2.2% YoY in November. Economists had predicted a 2.5% increase.
The Japanese Ministry of Economy Trade and Industry (METI) reported that retail sales in Japan increased by 1.8% MoM in November, following a downwardly revised slip of 0.2% MoM in the previous month. This represented the first monthly gain in Japanese retail sales in three months and the strongest advance since September 2021 (+2.8% MoM). Compared to November 2023, retail sales surged by 2.8%, the most since August (+3.1%), after a downwardly revised 1.3% advance in October. Economists had anticipated a 1.7% YoY rise.
A separate report revealed that industrial production in Japan declined by 2.3% MoM in November, following a 2.8% MoM growth in the previous month. This marked the first monthly decline in industrial output in three months but was better than economists’ prediction of a 3.4% MoM fall. On a YoY basis, industrial production decreased 2.8%, the most since August (-4.9%).
Meanwhile, Ministry of Internal Affairs and Communications announced that Japan’s unemployment rate came in at 2.5% in November, unchanged from October.