This week, investors are closely watching key data releases that will impact the pace of rate cuts by central banks. Japanese Tokyo CPI inflation, US GDP, and PCE inflation are the main focus.
The USD/JPY pair is holding steady below the 157.00 handle as traders await important data during the Pacific market session. With US markets closed on Monday for Memorial Day, Tuesday marks the beginning of the trading week for the pair. Investors are also paying attention to speeches from Federal Reserve policymakers.
In Japan, Corporate Services Price Index inflation exceeded expectations, rising 2.8% year-over-year in April, the fastest pace since 2015. Core Tokyo CPI inflation is expected to increase to 1.9% year-over-year from the previous 1.6%.
On the US front, GDP growth and PCE Price Index inflation figures are anticipated later in the week. Thursday’s GDP growth is predicted to decrease to 1.4% in Q1, while Friday’s Core PCE Price Index inflation is forecasted to remain at 0.3% month-over-month.
Despite a weaker US Dollar on Monday, the USD/JPY pair remains below 157.00. The pair has recovered over half of its losses from multi-year highs and continues to trade above the 200-day Exponential Moving Average. In 2024, USD/JPY has seen an increase of over 11%.
Overall, the market awaits key data releases this week that will influence the direction of central bank rate cuts and impact the USD/JPY pair’s movements.