The USD/JPY pair climbed on Wednesday as the Japanese Yen continued to sell off. Yen traders are eagerly awaiting the Tokyo Consumer Price Index (CPI) inflation data scheduled for release on Friday. Additionally, key data such as US Gross Domestic Product (GDP) and Personal Consumption Expenditure (PCE) Price Index inflation are expected to be released this week, which will be closely watched by investors hoping for rate cuts from the Federal Reserve.
On Tuesday, the USD/JPY pair drifted towards 157.40 as the weakness in the Japanese Yen caused Yen pairs to rise across the board. The Tokyo CPI inflation data is crucial for Yen traders this week, while US growth and inflation figures are highly anticipated by investors. The Bank of Japan (BoJ) has refrained from raising interest rates due to concerns about sub-target inflation, resulting in the Yen’s rate differential with other major central banks remaining high, leading to further weakening of the JPY.
Investors will keep a close eye on Friday’s Japanese Tokyo CPI inflation data, with Core Tokyo CPI inflation expected to increase from 1.6% to 1.9%. US GDP and PCE Price Index inflation figures, set to be released on Thursday and Friday, respectively, will also be important indicators for investors seeking clues about potential Fed rate cuts. While US Annualized Q1 GDP is projected to decrease to 1.3% from 1.6%, Core PCE Price Index inflation is expected to remain stable at 0.3% MoM.
From a technical standpoint, the USD/JPY pair is steadily moving towards the 158.00 level and has been closing in the green for most of the last 17 consecutive trading days. Bullish pressure has kept the pair firmly in bull territory, with the 200-day Exponential Moving Average (EMA) at 148.89 providing support. This bullish momentum has pushed the pair towards higher levels, indicating a positive trend for USD/JPY in the near term.
In conclusion, the USD/JPY pair has been on an upward trend as the Japanese Yen continues to weaken. Yen traders are eagerly awaiting important inflation data from Japan, while US GDP and inflation figures will also play a crucial role in determining the future direction of the pair. With the USD/JPY pair approaching the 158.00 level and showing bullish momentum, investors are closely monitoring these key data releases for further insights into potential rate cuts by the Federal Reserve.
