USD/JPY maintained a positive base near 151.50 following Japanese CPI data.

• USD/JPY is trading stronger around the mid-151.00 range on Friday.
• Japan Governor Kishida said it was appropriate for the Bank of Japan (BoJ) to maintain an easy monetary policy.
• The Fed’s Waller has said he is in no rush to cut interest rates and may need to keep rates on hold for longer than expected.

The USD/JPY pair maintained gains for a second straight day near 151.45 on Friday during Asian morning trading. The Bank of Japan’s cautious approach to easing monetary conditions is putting some selling pressure on the Japanese Yen (JPY). Additionally, hawkish comments from Federal Reserve (Fed) officials are providing some support to the US dollar (USD) and USD/JPY.

According to data released by the National Statistical Office of Japan, the Tokyo Consumer Price Index (CPI) rose 2.6% in March, following a 2.6% rise in February. Meanwhile, Tokyo CPI, excluding fresh food and energy, rose 2.9% year-on-year, down from a 3.1% rise in February. However, JPY remains on the defensive due to Japanese inflation data and dovish comments from Japanese authorities.

Japanese Prime Minister Fumio Kishida said on this day, “It is appropriate for the central bank to maintain accommodative monetary conditions.” Kishida also said the government would continue to work closely with the BoJ to raise wages and steer the economy out of deflation.

Nonetheless, potential intervention by Japanese authorities could limit JPY weakness. Japanese Finance Minister Shuichi Suzuki made a verbal intervention last Friday, saying he would be watching foreign exchange movements very closely and would not rule out any measures to counter disorderly FX movements.

On the USD side, strong US economic data and the Fed’s explanation for rising long-term interest rates are pushing the dollar higher against its peers. Federal Reserve President Christopher Waller, the most outspoken policy hawk, said Thursday that the central bank was in no rush to cut interest rates and “may have to maintain its current interest rate target for longer than expected.” Waller added that he would need to see more inflation progress before supporting a rate cut.

Next week, Japan’s first quarter (Q1) Tankan Large Manufacturing Index and the U.S. ISM Purchasing Managers’ Index (PMI) report will be released. On April 5, US March non-farm payrolls (NFP) will be in focus.