Japanese Yen selling remains unabated amid doubts over BoJ’s rate-hike plans and relentless USD buying

A rise in Japan's wholesale inflation in October complicates the Bank of Japan's (BoJ) decision regarding the timing of a potential interest rate hike amid mounting domestic economic concerns. 

The Japanese government is reportedly making arrangements to compile a supplementary budget to fund a stimulus package to help low-income households and offset rising prices.

Masato Kanda, now a special advisor to Japan's Prime Minister Shigeru Ishiba, said that authorities will act appropriately against excess movements in the FX market.

The US Bureau of Labor Statistics reported on Wednesday that the headline US Consumer Price Index (CPI) rose by 0.2% in October and by 2.6% over the last twelve months.

Meanwhile, the core CPI — which excludes the more volatile food and energy categories — recorded an increase of 3.3% as compared to the same time period last year. 

The data did not change expectations that the US Federal Reserve would deliver a third interest rate cut in December against the backdrop of a softening labor market.

The continuation of the so-called Trump trade keeps the US Treasury bond yields elevated near a four-month peak and lifts the US Dollar to a fresh year-to-date high. 

Traders now look forward to the release of the usual US Weekly Initial Jobless Claims data and the US Producer Price Index (PPI) for short-term opportunities.