Japanese yen weakens despite inflation accelerating

[Japan flag with stock market finance, economy trend graph digital technology.]
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Japan’s annual inflation rate rose to 2.9% in September 2025 from August’s 10-month low of 2.7%. The Consumer Price Index in Japan increased 0.10 percent in August of 2025 over the previous month. Core inflation came in at 2.9%, matching consensus and rising from the prior 2.7%, for the first time since May.

The S&P Global Japan Manufacturing PMI declined to 48.3 in October 2025, from September’s six-month low of 48.5 and below market forecasts of 48.6, preliminary estimates showed.

Flash S&P Global Japan Services PMI fell to 52.4 in October 2025 from a final 53.3 in the previous month.

The S&P Global Japan Composite PMI fell to 50.9 in October 2025 from a final 51.3 in September, flash data showed, marking the lowest level since May and signaling a second straight month of slower growth.

Japan’s coincident economic index fell to 112.8 in August 2025, below the preliminary reading of 113.4 and down from 114.1 in August. It was the lowest reading since February 2024, reflecting persistent inflationary pressures.

Japan's Nikkei 225 index traded 1.44% higher after the economic numbers were released.

The Japanese yen (JPY:USD [https://seekingalpha.com/symbol/JPY:USD]) (USD:JPY [https://seekingalpha.com/symbol/USD:JPY]) weakened toward 153 per dollar on Friday and was on track to lose about 1.5% for the week, even as core inflation in Japan accelerated in September for the first time since May.

ETFs to track Japanese market: (NYSEARCA:EWJ [https://seekingalpha.com/symbol/EWJ]), (NYSEARCA:DXJ [https://seekingalpha.com/symbol/DXJ]), (NYSEARCA:FXY [https://seekingalpha.com/symbol/FXY]), (NYSE:JEQ [https://seekingalpha.com/symbol/JEQ])

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