USDJPY edged up to approximately 149.50, headline US Inflation Could Moderate
A drop in US inflation figures may boost the case for Fed rate reduction.
USDJPY continues to rise, approaching 149.50 during Tuesday’s Asian trading session.
The USDJPY declines amid market anxiety about the BoJ’s rate rises.
The Japanese yen (JPY) falls against the US dollar (USD) on market concerns about rate hikes after the Bank of Japan’s (BoJ) shift away from its ultra-dovish monetary policy stance.
Shinichi Uchida, Deputy Governor of the Bank of Japan, has recently expressed reluctance to maintain vigorous tightening, notwithstanding the abandoning of negative interest rates. However, the Japanese yen may profit from its safe-haven status as tensions between Israel and Gaza rise.
The US The Dollar Index (DXY) is on an upward trend for the second consecutive day, hovering around 104.20. However, the Greenback’s gains may be limited by low US Treasury yields, which are currently at 4.47% and 4.18%, respectively.
The USDJPY pair gains as traders remain cautious ahead of the release of US inflation data on Tuesday. In Japan, the focus will be on Gross Domestic Product (GDP) figures, which is planned for release on Thursday.
The US Consumer Price Index (CPI) is forecast to reduce, rising by 2.9% year on year, down from 3.4% previously. The monthly rate is expected to remain unchanged at 0.2%. While the preliminary Japan’s GDP (Q4) is predicted to expand by 0.3% vs the previous decline of 0.7%.
