During Friday's early Asian deals, the Japanese yen jumped to a new multi-month high against the British pound as Japan's core inflation rose at its fastest pace in more than a decade in July. The yen also climbed against its other major counterparts.
The Ministry of Internal Affairs and Communications said that the overall inflation in Japan increased by 2.3 percent year-over-year in July, marking the biggest jump in the consumer price index since October 1997, when it rose 2.5 percent over the previous year.
The July inflation rate came in slightly higher than analyst expectations that called for a 2.2 percent annual jump, and it was higher than the 2.0 percent gain in June. It also marked the 10th consecutive monthly increase, largely fueled by a 28.7 percent jump in gasoline prices. The global market surge has not made much of an impact on the yen today. Stocks across the Asia-pacific have been gaining on a positive economic report released from the US yesterday. Usually yen weakens following a surge in equities as the Japanese currency is seen as a safe haven for investors in times of economic uncertainty.
The Japanese stock market was trading higher today after a mixed finish on Thursday. At 8.56 P.M. ET, the benchmark Nikkei 225 Index was advancing 187.31 points or 1.47% to 12,955.56, while the broader Topix Index of all First Section Issues was up 20.93 points to 1,240.46.
Yen is the favorite currency of carry traders because the nations' interest rate is 0.5%, which is the lowest among the industrial world. This helps speculators get funds with low borrowing costs and invest where returns are higher. Speculators profit due to the spread between both rates. Nevertheless, currency fluctuations can erase profits between the two rates.
During early Asian deals on Friday, the yen rose to 199.67 against the British pound, compared to Thursday's closing value of 200.38. This set the highest point for the yen against the UK currency since April 16, 2008.
The British pound has been weakening against its major counterparts on worries about the health of the economy, which is showing increasing signs of weakness in the past weeks. Growing expectation that the UK interest rates would be cut by the end of the year is also weighing on the pound.
The yen, which climbed to a new multi-year high of 192.66 against the pound on March 17, weakened thereafter. But the yen regained its momentum on July 23 after falling to a new multi-month low of 215.92 on July 23. Since then, the yen has gained around 7.5% against the sterling.
A report released yesterday by the Nationwide Building Society pressured the pound which said that the house prices in UK fell 10.5% year-on-year in August, its biggest drop since the final quarter of 1990.
The yen climbed to 99.52 against the Swiss franc and a 2-day high of 160.65 against the euro during Friday's early Asian deals. The franc-yen pair closed Thursday's deals at 99.71 and euro-yen pair at 161.06.
The Italian June retail sales and CPI, Swiss KOF leading indicator, euro-Zone July unemployment rate, CPI, consumer confidence and economic confidence are the major economic releases slated for release in the upcoming session.
The yen that was worth 109.51 against the US dollar at yesterday's close, climbed to 108.98 by about 9:55 pm ET. Yesterday, the dollar climbed against its major counterparts on a positive economic report, which said the US economy grew at an annual rate of 3.3% in the April-June quarter, compared with an earlier estimate of 1.9% growth.
The yen also gained against its Australian, Canadian and New Zealand counterparts during Friday's early Asian deals. The yen rose to a 3-day high of 103.77 against the Canadian dollar by about 12:20 am ET, compared to Thursday's closing value of 104.21.
The yen strengthened to 94.22 against the Aussie and 76.74 against the New Zealand dollar during today's early deals, compared to Thursday's closing values of 94.47 and 76.91, respectively.
The Australian and New Zealand dollars has been dropping on expectations of interest rate cuts by the central banks.
Apart from the CPI, a flurry of economic reports, which were released today from Japan, are likely to have influenced the yen.
The Manufacturing activity in Japan has retreated for a sixth consecutive month in August, the Nomura/JMMA Japan Purchasing Managers Index said, checking in at a seasonally adjusted 49.6. That's down slightly from the reading of 47 in July, and while it held above the six-year low of 46.5 in June - it still was below the boom-or-bust score of 50 that indicates contraction.
Japan's Industrial production climbed a seasonally adjusted 0.9 percent in July beating analyst expectations that called for a 0.3 percent monthly decline and it was well above June's 2.2 percent fall.
The unemployment rate in Japan eased to 4.0 percent in July, down from the two-year high of 4.3 percent in June, and it also came in below analyst expectations of 4.1 percent.
Retail Sales in Japan increased an annual 1.9 percent in July marked the 12th straight month of increases in overall retail sales, which rose 0.3 percent in June.
Japanese household spending eased an annual 0.5 percent in July. The July figure represented the fifth straight month of decline, although it beat analyst expectations of a 1.8 percent fall. Spending also fell by an annual 1.8 percent in June.
Investors now look forward to Japan's July housing starts and construction orders, small business confidence reports, which are due out at 1:00 am ET.
In the European session, the Italian retail sales and CPI, Swiss KOF leading indicator, Euro-zone unemployment rate, CPI, business and consumer confidence reports have been scheduled for release.
Turning to the US, the week ends on a busy note, with the release of the PCE deflator, personal income and spending, Chicago PMI and the University of Michigan's consumer confidence reports.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.