The US dollar strengthened against most major currencies on Thursday, particularly the Japanese yen, as investors awaited the delayed release of key US inflation data (CPI) scheduled for Friday, amid ongoing concerns over trade tensions between Washington and Beijing.

The dollar rose 0.38% against the yen to 152.44, while the euro slipped slightly to $1.1604, remaining within its recent trading range.

Nick Rees, head of macro research at Monex Europe, said: Theres a lot of uncertainty given the US government shutdown and the lack of data. Some traders are holding back, and theres a clear sense of caution ahead of the inflation figures.

He added that the CPI report will still be published despite the shutdown, allowing the US Social Security Administration to calculate its annual cost-of-living adjustment for 2026.

Fed Shifts Focus

Although the Federal Reserve has recently shifted its focus from inflation to the performance of the US labor market, inflation figures remain closely watched by markets.

Rees explained: The data this time are important for different reasons than usual. While the Fed has moved past the inflation phase, these numbers still offer valuable insight into consumer spending and overall economic growth.

Yen Under Pressure

Domestic factors have also weighed on the yen, which once again approached its seven-month low of 153.29 per dollar, last seen earlier in the week after the ruling party elected Sanae Takaichi known for her expansionary fiscal and monetary stance as its new leader.

With Takaichi now formally in office as Japans first female prime minister, investors are awaiting details of the anticipated stimulus package before taking new positions in the market.

Yutaka Miura, senior technical analyst at Mizuho Securities, said: Buying based on hopes for Takaichis economic policies has run its course. The market is now in a phase of evaluating how feasible those policies will actually be.

Sterling, Norwegian Krone, and Swiss Franc

The British pound held steady at $1.335 after recovering from Wednesdays decline that followed weaker-than-expected inflation data, which increased market bets on another Bank of England rate cut later this year.

In Europe, Scandinavian currencies attracted attention as the Norwegian krone strengthened on higher oil prices. The dollar fell 0.3% against the krone to 9.9949, dipping below the 10-krone mark for the first time in two weeks, while the euro slid to a one-month low at 11.58 krone.

The Swiss franc showed little reaction to the release of the Swiss National Banks first-ever meeting minutes, easing slightly to 0.797 per dollar and 0.9248 per euro.

Despite the mild decline, the franc remains close to the 0.92 level against the euro a threshold that Olivier Korber, derivatives strategist at Socit Gnrale, said could prompt the SNB to intervene in the market to weaken the currency.

Korber noted in a research memo: We believe the risk of intervention in the FX market is currently at its peak, so a near-term rebound in the EUR/CHF pair is quite possible.