Yen Surges, Sterling Holds Steady Ahead of US Inflation Data

Global currencies saw notable movements on Thursday, with the Japanese Yen climbing steadily against the US Dollar and the Pound Sterling holding its ground, as investors prepare for key US inflation numbers.


Yen Strengthened After Election Boost

The Japanese Yen gained momentum following the decisive election victory of Prime Minister Sanae Takaichi, giving her a clear mandate to implement expansionary economic policies. Investors expect her plans for increased government spending, tax cuts, and temporary relief on the food tax to stimulate Japan’s economy.


Japanese officials also signaled they are ready to manage currency fluctuations, adding further support to the Yen. The US Dollar weakened in response, reflecting growing confidence in Japan’s policy direction.


Sterling Remains Stable


The Pound Sterling edged slightly higher after recovering from a brief dip caused by strong US employment data. The Bank of England recently held interest rates steady and expects inflation to gradually return to its target. UK economic growth remains slow, but easing political uncertainty has provided support to the currency.


Eyes on US Inflation

All eyes are now on the upcoming US Consumer Price Index report. Investors anticipate that the results could influence the US Dollar and affect global markets. A softer inflation reading could weaken the Dollar and lift both the Yen and Sterling, while stronger figures might have the opposite effect.


What to Watch

The market is in a cautious mood as traders await the US inflation data, which is likely to determine the next major moves for both the Yen and the Pound.