Japanese Yen fails to build on stronger CPI-led intraday uptick against USD

The Japanese Yen ticks higher as stronger domestic inflation revives bets for more BoJ rate hikes.

The upbeat market mood and elevated US bond yields cap the upside for the lower-yielding JPY.

The USD stands firm near its highest level in over a year and offers support to the USD/JPY pair. 

The Japanese Yen (JPY) attracted some follow-through buying for the second successive day following the release of slightly higher-than-expected consumer inflation figures from Japan. This comes on top of Thursday's hawkish remarks from BoJ Governor Kazuo Ueda, which keeps expectations for a December interest rate hike in play. Adding to this, Japan's Prime Minister Shigeru Ishiba’s economic stimulus package worth ¥39 trillion boosts the JPY and exerts some pressure on the USD/JPY pair. 

That said, the prevalent risk-on environment and elevated US Treasury bond yields hold back traders from placing aggressive bullish bets around the lower-yielding JPY. Investors remain concerned that US President Donald Trump's policies could reignite inflation and force the Federal Reserve (Fed) to cut interest rates slowly. This has been a key factor behind the recent surge in the US bond yields, which keeps the US Dollar (USD) near the year-to-date peak and lends support to the USD/JPY pair.