Tokyo Core CPI remains unchanged, US PCE Index ticks higher, yen stabilizes

[Redator]

The Japanese yen has stabilized on Friday. In the North American session, US/JPY is trading at 149.61, down 0.11% on the day. The yen has taken a beating over the past two days, falling 1.5%.

Tokyo Core CPI remains unchanged at 2.5%

Tokyo Core CPI held steady in September at 2.5% y/y. This matched the downwardly revised August reading and was lower than the market estimate of 2.8%. Tokyo Core CPI excluding food and energy dropped to 2.5%, down sharply from 3.0% in August. Food inflation remains high but eased to 6.9% in September from 7.4% in August.

The Bank of Japan will include this data in the mix when it meets next on October 29-30. Aside from inflation, BoJ policymakers will be looking at the impact of US tariffs on the economy.

The BoJ held rates last week, but there are signs of a hawkish shift, as two members dissented and voted to hike rates from 0.5% to 0.75%. A rate hike is likely in the pipeline but the BoJ is not known for its transparency and prefers to keep the markets guessing about its rate moves.

US PCE creeps higher

The US PCE Price Index, which is the Federal Reserve's preferred inflation indicator, ticked higher in August. Annualized, PCE rose to 2.7%, up from 2.6% in July and in line with the consensus. Monthly, PCE gained 0.3%, up from 0.2% in July and matching the consensus.

With inflation largely under control, the Federal Reserve's priority has shifted to the US labor market. The last two nonfarm payrolls reports showed marginal job growth and missed expectations, raising concerns that the labor market is quickly losing steam. If next week's nonfarm payroll report is soft, it could cement an October rate cut.

USD/JPY Technical

• USDJPY is testing support at 149.75. Next, there is support at 149.62
• There is resistance at 149.89 and 150.02

USDJPY 1-Day Chart, September 26, 2025

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2025 OANDA Business Information & Services Inc.