The USD/JPY pair continued to fall on Friday amid the escalation of the military conflict between Israel and Iran.
On Friday night, Israel launched retaliatory missile strikes against Iran near the airport in the city of Isfahan, where Iran's military-industrial complex and nuclear industry are concentrated. On the eve of the strike, Iranian President Ibrahim Raisi warned Israel that Tehran would give a "tough response" to any attack on its territory.
The risk-averse sentiment and rising tensions between Israel and Iran have increased demand for safe-haven assets, which has benefited the strengthening of the Japanese yen, FX Street reported.
In addition, Taiwan's Defense Ministry reported that four Chinese military aircraft crossed the median line of the Taiwan Strait in the past 24 hours.
Meanwhile, the latest US economic data and comments from Federal Reserve officials may limit the pair's decline.
On Thursday, Bank of Japan Governor Kazuo Ueda said that the central bank may raise interest rates if the yen's decline triggers a rise in inflation.
Markets are now expecting the Bank of Japan to revise its inflation forecast for this fiscal year at its meeting next week.
The latest data from the Statistics Bureau of Japan showed that year-on-year growth in the consumer price index slowed to 2.7% in March from 2.8% in February. Similarly, growth in the core CPI, which excludes fresh food prices, fell to 2.6% from 2.8% in the previous month. However, inflation remains above the Bank of Japan's 2% target.
It is worth noting that Bank of Japan board member Asahi Noguchi believes that rate hikes are likely to be slow and will depend directly on economic data.
Analysts have already pointed out that the uncertainty surrounding the Bank of Japan's future rate hikes continues to put pressure on the yen.
At the time of writing, the USD/JPY is trading at 154.39, down 0.15% over the past 24 hours.
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