Yen Steadies Near Multi-Decade Lows as Tokyo CPI Looms

The Japanese yen held steady against the dollar on Tuesday, with USD/JPY edging up to around 163.80 and staying within sight of multi-decade highs. The pair’s resilience reflects persistent yen weakness as the market awaits the latest Tokyo consumer price data, seen as a leading indicator for nationwide inflation trends.

A decline in U.S. consumer confidence prevented the dollar from extending gains, but the greenback remained broadly supported, keeping the exchange rate elevated. The lack of aggressive yen buying suggests investors are skeptical about immediate policy changes from the Bank of Japan.

Market participants are focusing on the Tokyo inflation release, as a higher-than-expected print could fuel speculation of a BOJ policy tweak, potentially boosting the yen. Conversely, a soft number would likely reinforce the carry trade and pressure the yen further.