USD/JPY softened to around 142.25 amid lower volume on Friday. The U.S. dollar (USD) traded lower against the Japanese yen (JPY) amid concerns about the impact of tariffs on the economy.

Data released by Japan's Statistics Bureau on Friday showed that the national consumer price index (CPI) rose 3.6% year-on-year in March, down from 3.7% previously. Meanwhile, the national CPI excluding fresh food rose 3.2% year-on-year in March, compared with 3.0% previously. The data is consistent with market consensus.

Finally, CPI excluding fresh food and energy rose 2.9% year-on-year in March, up from 2.6% previously. The yen remained strong in immediate reaction to Japanese inflation data.

However, the yen's upside could be limited as Bank of Japan (BoJ) officials signaled a pause in considering rate hikes, stressing the need to monitor heightened uncertainty due to U.S. tariff measures. "We will carefully assess the economy and inflation in order to make appropriate policy decisions taking into full account uncertainties caused by U.S. tariff measures and other issues," Bank of Japan Governor Kazuo Ueda said on Thursday.

Another board member, Junko Nakagawa, echoed Ueda’s sentiments in separate remarks, saying it was necessary to monitor developments with great vigilance. Japanese Finance Minister Katsunobu Kato is expected to hold a separate meeting with Treasury Secretary Scott Bessant to continue talks initiated by Prime Minister Shigeru Ishiba’s chief tariff negotiator Yoshio Akazawa. Investors will be watching the progress of trade negotiations between countries.

U.S. economic data on Thursday was mixed. The number of Americans filing new claims for unemployment benefits fell to the lowest level in two months, pointing to a solid labor market. Additionally, the Philadelphia Fed index fell, failing to meet expectations and the manufacturing sector sent a warning signal.