FX.co ★ Yen Slips Ahead of BOJ Decision

The Japanese yen slipped beyond 155.5 per dollar on Friday, continuing its recent decline as investors treaded carefully before the Bank of Japan's anticipated policy announcement. Analysts largely expect the central bank to increase its policy rate by 25 basis points to 0.75%, given inflation remains above the BOJ's 2% benchmark. Japan's overall inflation slightly fell to 2.9% in November from 3% in October but has surpassed the BOJ's target for the 44th month in a row. Meanwhile, core inflation persisted at 3%. All eyes are on Governor Kazuo Ueda’s press conference following the meeting for any indications on whether further rate hikes will occur next year. In contrast, Prime Minister Sanae Takaichi, who favors a more accommodative monetary approach, reportedly advocated on Wednesday for prioritizing active fiscal spending over stringent tightening to foster economic growth and enhance tax revenue during discussions with a business lobby.