Japan's service-sector inflation rose to 3.0% in November, marking the second consecutive month of acceleration and reaching its highest level since March 1995. This data supports the Bank of Japan's (BOJ) view that rising wages are prompting firms to pass on higher costs, indicating broadening inflationary pressures. While the BOJ maintained rates in December, Governor Kazuo Ueda emphasized a data-dependent approach, with a focus on wage prospects for future rate decisions. The potential for further rate hikes could enhance the attractiveness of the Japanese yen for investors seeking higher returns, potentially strengthening the yen against other currencies. However, global economic conditions, including inflation trends and growth prospects, will also influence currency movements. The BOJ's cautious approach suggests a gradual policy tightening, which may limit the yen's upside. As the BOJ prepares for its next rate review meetings in January and March, market participants will closely monitor these developments alongside global economic trends to gauge their impact on the foreign exchange market. #BOJ #InterestRates #JPY #Inflation