• The Japanese Yen fails to build on the overnight strength amid the BoJ rate hike uncertainty.
• A positive risk tone also undermines the JPY, though subdued USD demand helps limit losses.
• The fundamental backdrop suggests that the path of least hurdle for the JPY is to the downside.

The Japanese Yen (JPY) struggles to attract any meaningful buyers during the Asian session on Friday, with the USD/JPY pair holding just below its highest level since early August touched the previous day. A drop in Japan's real wages for the first time in three months, a decline in household spending and signs that price pressures from raw material costs were subsiding raised doubts about the Bank of Japan's (BoJ) rate hike plans. This continues to undermine the JPY ahead of Japan's snap election on October 27 and turns out to be a key factor acting as a tailwind for the currency pair. 

Meanwhile, the initial market reaction to the hotter-than-expected US consumer inflation figures released on Thursday turned out to be short-lived amid indications of labor market weakness. Given that the Federal Reserve (Fed) has shifted its focus on obtaining maximum sustainable employment, a surge in the US jobless claims suggested that the US central bank will continue cutting interest rates. This keeps the US Dollar (USD) bulls on the defensive, below a nearly two-month top set the previous day, and caps the USD/JPY pair as traders await the release of the US Producer Price Index (PPI).