The US Dollar saw some easing on Friday, but remained close to flat against the Yen. Japanese National CPI inflation also decreased in April. Risk appetite improved after the US consumer inflation outlook showed signs of improvement.
USD/JPY traded steadily on Friday, ending the day just below the 157.00 mark as investors tried to regain their balance following a tense week. Hopes for a September rate cut by the Federal Reserve were somewhat dashed this week after rate markets adjusted their odds of a cut downwards.
Looking ahead to the coming week, Fedspeak and PCE data will be in focus. Japan’s National Consumer Price Index (CPI) inflation dropped to 2.5% YoY in April, but the Bank of Japan (BoJ) remains committed to keeping interest rates low until inflation remains above 2%. The BoJ expects inflation to stay below 2% for the foreseeable future.
Despite efforts by the BoJ to intervene in global markets, the Yen continues to weaken, pushing Yen-based pairs higher. USD/JPY has been trading above the 200-day EMA and is slowly recovering from recent lows.
On the technical side, USD/JPY has been trading above the 200-day EMA and remains in bull territory. The pair has been showing signs of recovery from recent lows and is slowly moving towards multi-year highs set in April.
In conclusion, the US Dollar saw mixed movements against the Yen on Friday, with Japanese National CPI inflation decreasing in April. Risk appetite improved after positive US consumer inflation outlook. Looking ahead, Fedspeak and PCE data will be closely watched. Despite BoJ intervention, the Yen continues to weaken, pushing Yen-based pairs higher. Technical analysis shows USD/JPY trading above the 200-day EMA and slowly recovering from recent lows.
