The USD/JPY pair has risen to 156.50 as investors await key US inflation data. The market is anticipating a possible interest rate cut by the Federal Reserve starting in September. Japan’s Q1 GDP figures will also be closely watched to gauge the country’s economic strength.
The US Consumer Price Index (CPI) data for April and Japan’s preliminary Q1 Gross Domestic Product (GDP) data are expected to impact trading decisions. Market analysts predict a slight softening in the annual headline CPI to 3.4% from 3.5% in March. Core inflation, excluding volatile food and energy prices, is forecasted to slow to 3.6% from the previous 3.8%.
Investors will also pay attention to the US Producer Price Index (PPI) data for April, which will be released at 12:30 GMT. This data will provide insights into price changes for goods and services at the producer level.
On the other hand, concerns about the Bank of Japan’s policy direction are weighing on the Japanese Yen. The upcoming release of Q1 GDP data on Thursday is expected to show a contraction of 0.4% after a 0.1% expansion in the previous quarter. An annualized contraction of 1.5% is also anticipated, raising doubts about the BoJ’s tightening policy plans.
Overall, market participants are closely monitoring economic data releases from both the US and Japan to assess the future direction of the USD/JPY pair and policy decisions by central banks.