USD/JPY saw a rise on Wednesday as the Japanese Yen continued to weaken. Traders are keeping an eye on the Tokyo CPI inflation data set to be released on Friday. Additionally, important data such as US GDP and PCE inflation figures are being closely watched by investors who are hopeful for rate cuts.
On Tuesday, USD/JPY tested towards 157.40 as the Japanese Yen faced selling pressure, pushing Yen pairs higher. The upcoming Tokyo CPI inflation data is crucial for Yen traders this week. Meanwhile, US growth and inflation numbers are of high importance for those looking for clues on possible rate cuts from the Federal Reserve.
Yen traders are anticipating an increase in Core Tokyo CPI inflation to 1.9% from 1.6% on Friday. The Bank of Japan has refrained from raising interest rates due to concerns about inflation remaining below target levels. This has led to the Yen’s rate differential with other major central banks to widen, causing the JPY to weaken despite intervention efforts.
US GDP and PCE Price Index inflation data are scheduled for release on Thursday and Friday, respectively. Investors are eager to see if there are indications of potential Fed rate cuts. It is expected that US Annualized Q1 GDP will ease to 1.3% from the previous 1.6%, while Core PCE Price Index inflation is forecasted to remain at 0.3% MoM.
USD/JPY has been steadily climbing towards the 158.00 mark, with bullish pressure keeping the pair in an upward trend. The pair is trading above the 200-day Exponential Moving Average (EMA) at 148.89, indicating a strong bullish sentiment.
Overall, the outlook for USD/JPY remains positive as the Yen weakens and key economic data releases are awaited by traders and investors.