Analyst: If Japanese inflation data boosts rate hike bets, the yen may further appreciate.

ChainCatcher message, the yen against the dollar reached a 10-week high, ChrisTurner, an analyst at ING, said in a report that if the upcoming inflation data supports market expectations for further rate hikes by the Central Bank of Japan, the yen may further strengthen. The data shows that the market expects a higher possibility of Japan’s Central Bank raising interest rates in July, but it will not fully factor in the 25 basis points rate hike expectation until September. Turner said it was surprising how strong the yen’s reaction was to these ‘relatively moderate interest rate changes.’ However, despite the possibility of Japanese inflation data further driving the USD/JPY lower in the short term, the USD/JPY exchange rate is not expected to plummet significantly.