The Japanese yen strengthened toward 145 per dollar on Friday, recovering some of its recent losses after core inflation in Japan accelerated for the third straight month to 3.7%, the highest reading since January 2023. This reinforces expectations that the Bank of Japan may continue tightening monetary policy to combat persistent inflationary pressures. Earlier this week, the BOJ kept its benchmark interest rate steady at 0.5% but noted that companies are continuing to pass wage increases onto prices, keeping core inflation elevated. BOJ Governor Kazuo Ueda reiterated the bank’s data-dependent approach, signaling openness to further rate hikes if inflation remains persistent. Despite Friday’s rebound, the yen remains down nearly 1% for the week, pressured by a stronger US dollar amid heightened safe-haven demand driven by escalating tensions between Israel and Iran and the potential for US involvement in the region.