USD/JPY holds steady as Tokyo inflation data keeps December BOJ rate hike likely

USD/JPY traded relatively unchanged at 151.45 following the release of Tokyo inflation data that reinforced expectations for a Bank of Japan rate hike in December. Tokyo's core CPI accelerated to 2.2% year-on-year in November, up from 1.8% in October, exceeding the BOJ's 2% target and marking the highest reading in four months. The inflation uptick, driven by reduced government subsidies and rising service prices, strengthens the case for the BOJ to raise rates from the current 0.25% at its December 19 meeting. Markets are pricing in a 60% probability of a 25 basis point hike. The yen's gains remain capped by persistent yield differentials, with US 10-year yields still 350 basis points above Japanese equivalents. Technical resistance stands at 152.00 (weekly high), while support lies at 150.80 (200-day moving average). Traders await next week's US NFP data and further BOJ commentary for directional cues.