• USD/JPY marks to fresh 38-year high of 161.27.
• Tokyo CPI rose to 2.3% year-over-year in June, up from the previous period's 2.2%.
• The US Dollar (USD) gains ground due to higher yields on US Treasury bonds.

USD/JPY trades around 161.00, the highest level since 1986, during the Asian session on Friday. The Consumer Price Index (CPI) inflation in Tokyo rose to 2.3% year-over-year in June, up from the previous period's 2.2%. Core Tokyo CPI inflation, which excludes volatile food prices, also increased during the same period, reaching 2.1% YoY compared to the previous 1.9%, surpassing the median market forecast of 2.0% YoY.

Japanese Finance Minister Shunichi Suzuki stated on Wednesday that he "will take appropriate steps on excessive FX moves." Suzuki refrained from commenting on specific forex levels or potential interventions but emphasized the importance of currencies moving in a stable manner that reflects fundamentals. Chief Cabinet Secretary Yoshimasa Hayashi echoed similar sentiments as the Finance Minister.

The US Dollar (USD) gains ground due to higher yields on US Treasury bonds. 2-year and 10-year yields stand at 4.72% and 4.30%, respectively, by the press time. Federal Reserve (Fed) Board of Governors member Michelle Bowman noted on Thursday that while current Fed policies should be enough to drag inflation back to target, the Fed shouldn't be unwilling to weigh further rate cuts in inflation data proves sticky.