Japanese Yen retains intraday positive bias; USD/JPY slides to mid-151.00s – FXStreet

• The Japanese yen rose slightly following the release of stronger PPI print from Japan.
• Uncertainty about how quickly the Bank of Japan can raise interest rates has kept yen bulls on the defensive.
• The US dollar maintains its recent gains and supports USD/JPY ahead of the US CPI report.

The Japanese yen (JPY) maintains modest intraday gains heading into Wednesday's European trading, but lacks bullish conviction amid skepticism over the Bank of Japan's intention to raise interest rates in December. . Separately, a further recovery in US bond yields will also help limit the upside of the low-yielding yen.

Meanwhile, rising Japan's producer price index (PPI) leaves the door open for further policy tightening by the Bank of Japan. This, along with concerns about geopolitical risks and US President-elect Donald Trump's tariff plans, is supporting the safe-haven Japanese yen. Additionally, the USD/JPY pair continues to languish around 151.65 as the price movement of the US dollar (USD) remains subdued.

Investors are now anxiously awaiting the release of the latest U.S. consumer inflation data, which could provide a hint as to the Fed's rate-cutting path. This will play an important role in influencing the USD and will give new impetus to the USD/JPY pair. Market attention will then turn to next week's major central bank event risks, namely the FOMC and Bank of Japan policy meetings.

Japanese yen struggles to capitalize on gains from rising PPI

• According to the Bank of Japan's preliminary report this Wednesday, Japan's producer price index (PPI) rose 0.3% in November, an increase of 3.7% compared to the same period last year.
• This overlaps with last Friday's wage growth rate, which saw basic wages rise 2.7% year-on-year in October, the highest increase since November 1992, and gives the Bank of Japan new reason to raise interest rates.
• Additionally, Bank of Japan Governor Kazuo Ueda recently said the next rate hike is nearing, although some media reports suggest the central bank may hold off on raising rates later this month.
• Additionally, the more dovish BOJ board member Toyoaki Nakamura said last week that the BOJ needs to act cautiously in raising interest rates, increasing uncertainty over the bank's December policy decision.
• U.S. Treasury yields ended Tuesday at their highest levels in at least a week, with widespread expectations that the Federal Reserve will be cautious about cutting interest rates.
• The US dollar maintains gains recorded over the past three days, providing some support for the USD/JPY pair, as traders eagerly await the latest US consumer inflation data to be released later today. .
• The key U.S. consumer price index (CPI) is expected to rise to 0.3% in November, compared with 0.2% the previous month, and 2.7% year-on-year, up from 2.6% in October.
• Meanwhile, core indicators (excluding food and energy prices) are expected to remain unchanged at 0.3% in November, or 3.3% year-on-year, raising concerns that inflationary pressures will persist.
• The statistics won't necessarily derail expectations that the Fed will cut rates when it meets next week, but it could suggest that the pace of rate cuts will be slower than most expected.

USD/JPY bulls wait for above 152.00 before placing new bets

The failure to accept above the 152.00 mark, which is in line with the 200-day simple moving average (SMA), is a cause for alarm for bulls. Additionally, the oscillator on the daily chart is neutral, so it would be wise to wait for sustained strength above the aforementioned barrier before bracing for an extension of the recent rebound from nearly two-month lows. Thereafter, USD/JPY could rise to the 152.70-152.75 region or the 50% retracement level of the decline from November's multi-month high. This is followed by a round number of 153.00, above which the spot price could gain momentum towards the 61.8% Fibonacci level around the 153.70 area.

Conversely, weakness below the 151.55-151.50 area could be seen as a buying opportunity and suitable support could be found near the 151.00 mark. However, some follow-through selling could expose the psychological mark at 150.00, with some intermediate support near the 23.6% No Fibo. Level, around 150.50. If the aforementioned support levels fail, the USD/JPY pair could be pulled back into the 149.55-149.50 area on its way to the 149.00 round figure and the 148.65 zone, the lowest level since October 11, reached last week. .