- The US dollar/yen rose on Wednesday as yen selling continued.
- Yen traders will be keeping a close eye on Tokyo CPI inflation figures on Friday.
- This week, US GDP and PCE inflation will be key data points for rate cut hopefuls.
USD/JPY moved to higher territory, trading near the $157.40 mark on Tuesday, as a broader market sell-off in the Japanese Yen (JPY) led to a broader rise in the pair. Japan’s Tokyo Consumer Price Index (CPI) inflation rate remains a key indicator for yen traders this week, while US growth and inflation rates will be big releases for investors looking for signs of an interest rate cut by the Federal Reserve (Fed).
Yen traders are keeping a close eye on Tokyo CPI inflation on Friday, with Tokyo core CPI inflation widely expected to rise to 1.9% from 1.6%. The Bank of Japan (BoJ), concerned about a return to below-target inflation, has steadfastly avoided raising interest rates and has kept the yen’s rate differential with other major central banks much higher than before, pushing the yen further downwards despite possible “yen intervention” in recent weeks.
As investors continue to watch for signs of a Fed rate cut, key indicators this week will be U.S. gross domestic product (GDP) and personal consumption expenditures (PCE) price index inflation, due out on Thursday and Friday, respectively. U.S. first-quarter annualized GDP growth is expected to ease to 1.3% from the previous 1.6%, while core PCE price index inflation is forecast to be flat at 0.3% month-on-month.
USD/JPY Technical Outlook
USD/JPY continues to move towards the upper limits, approaching 158.00 after closing in positive territory in all but 4 of the past 17 trading days. Bullish pressure has kept the pair deep in the bullish zone, trading firmly north of the 200-day exponential moving average (EMA) at 148.89.
