The Japanese yen declined in the Asian market on Thursday against a basket of major and minor currencies, retreating from a two-year high against the U.S. dollar. This drop is attributed to correction and profit-taking activities, alongside data showing a slowdown in Tokyo's core inflation, which missed April expectations.

Despite the current retreat, the Japanese currency is on track to achieve its largest weekly gain since February, supported by the Bank of Japan's actual intervention in the foreign exchange market to bolster the local currency and curb excessive volatility.

Price Overview

* Japanese Yen Exchange Rate Today: The dollar rose against the yen by approximately 0.5% to (157.33), from an opening price of (156.59), after hitting a session low of (156.51).

* The yen ended Thursdays trading up 2.4% against the dollar, marking its first daily gain in three days and its largest single-day advance since January 23, 2023. It touched a two-month high of 155.54 yen following the BoJ's intervention.

* Earlier on Thursday, the yen had slumped to 160.72 per dollar, its lowest level since July 2024.

* Thanks to official intervention, the yen ended April up 1.35% against the dollar, recording its first monthly gain in three months.

Tokyo Core Inflation

Data released today in Japan showed that the Tokyo Core Consumer Price Index (CPI) rose by 1.5% in April, lower than market expectations of 1.8% and down from the 1.7% recorded in March.

Lower-than-expected price data indicates receding inflationary pressures on monetary policymakers at the central bank, thereby reducing the chances of Japanese interest rate hikes later this year.

Japanese Interest Rates

* Following the inflation data, market pricing for a quarter-point rate hike by the BoJ at the June meeting fell from 75% to 65%.

* Investors are awaiting further data on inflation, unemployment, and wages to refine these expectations.

* BoJ Governor Kazuo Ueda stated this week that there is no immediate need to raise interest rates.

* On Tuesday, the BoJ kept interest rates unchanged for the third consecutive meeting, warning of escalating inflationary pressures due to the repercussions of the war with Iran and high energy prices.

* The vote to hold rates passed 6 to 3, with three members calling for a 25-basis-point hike to the 1.0% range.

Weekly Trading

Throughout this week's trading, which officially concludes with todays price settlement, the yen is currently up approximately 1.25% against the U.S. dollar. It is poised for its fourth weekly gain in five weeks and its largest weekly advance since last February.

Japanese Authorities

Japan's top currency diplomat, Atsushi Mimura, stated on Friday that speculation remains widespread, issuing an explicit warning that Tokyo is ready to return to the markets just hours after its previous intervention. When asked about potential future moves, Mimura told reporters: "I will not comment on what we will do in the future. But I assure you that the Golden Week holiday in Japan has only just begun."

Mimura's remarks followed Finance Minister Satsuki Katayamas warning on Thursday that the time for "decisive action" was approaching. She also urged journalists to keep their smartphones close throughout the holidaysa clear signal of Tokyo's readiness to deter speculators from exploiting thin liquidity to pressure the yen. Following her warning, the yen surged up to 3%, with sources telling Reuters that the BoJ indeed intervened in the market for the first time in nearly two years.