Japanese yen has attracted some buyers after the announcement of Japan’s consumer inflation numbers.

During the Asian session on Tuesday, the Japanese yen (JPY) strengthened slightly against its American counterpart. Reversing some of the previous day’s losses and bringing it closer to the YTD low reached earlier this month. Consumer inflation in Japan decreased somewhat less than projected in January. Fueling speculation of a near term turn by the Bank of Japan (BoJ). This, Along with a generally lower tone in the equity markets. Important variables provide a minor lift to the safe haven Japanese yen on fears. That Japanese authorities will intervene in the market to support the native currency.

The USD remains near a multi-week low with falling US bond yields, putting pressure on USDJPY.

The US Dollar (USD), on the other hand, continues to struggle to attract major purchasing. And is still well within striking distance of a multi-week low set last Thursday. This adds to the offered tone surrounding the USDJPY pair. However the decline lacks traction amid growing consensus that the Federal Reserve (Fed) will maintain interest rates higher for longer.

Traders may opt to wait for this week’s important US economic reports. Including the Personal Consumption Expenditures (PCE) Price Index on Thursday. before putting new directional bets.

Daily Market Movers: Japanese Yen receives a small boost following hopes for a BoJ pivot.

The somewhat higher-than-expected rate of inflation in Japan has reignited speculations on an imminent move in the Bank of Japan’s monetary stance, providing some support for the Japanese yen.
On Tuesday, Japan’s Statistics Bureau announced that the headline CPI increased by 0.1% MoM in January, although the YoY rate fell from 2.6% to 2.2% during the reported month.
According to the study, the Core CPI, which excludes volatile fresh food products, increased 2% year on year in January, compared to expectations of a 1.8% annual gain.
Furthermore, an underlying CPI reading excluding both fresh food and energy slowed. from 3.7% YoY in December to 3.5%, an 11-month low in January.
Meanwhile, the decrease in inflation comes on top of Japan’s unexpected recession in the fourth quarter, allowing the BoJ to maintain its ultra-loose policy.
The US dollar has fallen to its lowest level since February 2 on a weaker tone around US Treasury bond yields, which weighs on the Japanese yen pair.

The downside appears restricted ahead of this week’s significant US macroeconomic announcements, which include the PCE Price Index.

Following persistent inflation and a robust US economy, markets have pushed back expectations for the Federal Reserve’s first rate cut from May to June.
According to Kansas City Fed President Jeffrey Schmid, the US central bank should be patient and wait for compelling proof that the inflation struggle has been won.
Traders, on the other hand, appear hesitant to put aggressive wagers, preferring to wait for additional clues about the expected timing and speed of the US central bank’s interest rate decreases.
The market remained focused on the release of the US Personal Consumption Expenditures (PCE) Price Index on Thursday, which might provide the USD a boost.
Traders on Tuesday will face the publication of US Durable Goods Orders, the Conference Board’s US Consumer Confidence Index, and the Richmond Manufacturing Index.