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VT 
The consumer price index in Tokyo increased by 2.7% year-on-year in November. This figure aligns with the anticipated forecasts.
Global currency movements were reported, such as the Australian dollar firming due to higher inflation and the PBOC setting the USD/CNY reference rate slightly higher than before. The NZD/USD remains near its monthly high amid the Central Bank of New Zealand’s restrictive approach. GBP/USD saw gains driven by rising bets on US Federal Reserve rate cuts. Meanwhile, EUR/USD and gold remained steady with gold gaining support from dovish US Fed bets.
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Tokyo’s November inflation coming in at an expected 2.7% confirms that price pressures in Japan are persistent. This marks the 15th consecutive month that core inflation has remained above the Bank of Japan’s 2% target, looking back from our current date of November 28, 2025. This steady inflation makes it highly unlikely the BoJ will consider easing policy, keeping the yen supported.
US Federal Reserve Expectations
At the same time, we see growing expectations for the US Federal Reserve to begin cutting interest rates in the near future. The CME FedWatch Tool is now pricing in an over 70% probability of a 25-basis-point rate cut by the March 2026 meeting. This clear policy divergence between a steady BoJ and a dovish Fed continues to weigh heavily on the US dollar.
This environment makes bearish derivative plays on the USD/JPY pair particularly compelling over the next few weeks. After the extreme highs the pair saw back in 2023 and 2024, the path of least resistance now appears to be lower. We should consider buying put options or using bear put spreads to position for a further decline from its current level around 138.50.
This dollar weakness is not isolated, as we’re also seeing firmness in currencies like the Australian and New Zealand dollars. Their respective central banks have maintained a hawkish stance, creating a similar policy mismatch against the US. Therefore, long call options on AUD/USD and NZD/USD could also be an effective way to trade this broad-based dollar pressure.
