Japanese yen is attracting some follow through buying.

On Thursday, the Japanese Yen (JPY) extends its overnight recovery from a three-month low. And trades with a positive bias versus the US dollar. The USDJPY pair’s increase following the US CPI. Which above the psychological mark of 150.00. Sparked some vocal intervention from Japanese officials. This, together with geopolitical dangers resulting from wars in the Middle East. Overshadows the fact that the Japanese economy is entering a technical recession.

Bulls appear unmoved by data indicating that Japan’s economy fell in Q4.

In the fourth quarter and underpins the Japanese yen. In reality, provisional official statistics showed that Japan’s economy unexpectedly fell again in the fourth quarter, adding to doubt about when the Bank of Japan (BoJ) may end its negative interest rate policy.

Delayed Fed rate drop bets benefit USD bulls and may support USDJPY.

The US Dollar (USD), on the other hand, halts the overnight decline from its highest level since November 14, despite a further drop in US treasury bond yields acting as a headwind. Meanwhile, growing consensus that the Federal Reserve (Fed) would maintain interest rates higher for longer favors USD bulls and helps the USDJPY pair hold above the 150.00 psychological level throughout the Asian session. Traders now look to the US economic docket, which includes retail sales numbers, regional manufacturing indexes, The regular weekly initial jobless claims and industrial production figures. Aside from that, US bond yields will influence the USD, which, combined with broader risk sentiment, may create short term possibilities for the currency pair.

Daily Market Movers: Japanese Yen stays on the front foot amid intervention concerns and geopolitical threats.

Japan’s top currency diplomat, Masato Kanda, stated on Wednesday that the country will take appropriate forex moves if necessary, which is seen as providing some support to the Japanese yen.
Provisional data released on Thursday showed that Japan’s GDP dropped by 0.4% between October and December, falling far short of market estimates of 1.4% growth.
This is on top of the prior quarter’s 3.3% drop, confirming a technical recession and increasing doubt about the Bank of Japan’s plans to end its ultra-easy policies later this year.
Japan’s Economic Minister Yoshitaka Shindo expects the BoJ to cooperate closely with the government and implement appropriate monetary policy in order to reach its pricing target in a sustainable and consistent manner, accompanied by wage increases.
Furthermore, the overnight comeback in US equities markets may help to curb the safe-haven JPY, which, together with a bullish US Dollar, should limit losses in the USD/JPY pair.
The US inflation statistics for January, issued on Tuesday, pushed out expectations for the Federal Reserve’s first interest rate decrease to the middle of the year, which should support the USD.
Fed funds futures have priced out a rate drop in March, with a nearly 80% There is a likelihood of easing at the June meeting, with around three rate drops of 25 basis points apiece by the end of the year.
The US Retail Sales numbers for January are set to be released later in the North American session, with consensus expectations pointing to a 0.1% drop from the previous month’s flat reading.
Thursday’s US economic calendar also includes the Empire State Manufacturing Index, the Philadelphia Fed Manufacturing Index, and the weekly initial jobless claims and industrial production statistics.