The Japanese yen rose in Asian trade on Friday against a basket of major rivals, extending gains for the second straight session against the US dollar and moving away from a two-week trough on short-covering.

The gains are also underpinned by hot Tokyo inflation data, which showed increasing inflationary pressures on the Bank of Japans policymakers, boosting the odds of a rate hike in June.

The Price

The USD/JPY price rose 0.5% today to 143.43 yen per dollar, with a session-high at 144.18.

The yen rose 0.45% on Thursday against the dollar, the first profit in four sessions away from a two-week trough at 146.29.

Tokyo Inflation

Earlier data showed consumer prices in Tokyo rose 3.6% y/y in May, the fastest pace since January 2023, and up from 3.4% in April.

Following the data, the odds of a BOJ 0.25% interest rate hike in June rose from 35% to 45%.

Bank of Japan Deputy Governor Shinichi Uchida said the bank will continue to raise interest rates if the economy recovers from the negative impact of US tariffs, however he still cautioned that the economic outlook remains highly uncertain.

Now traders await important Japanese data on inflation, unemployment, and wages to gather more clues.