The Japanese yen has edged lower on Tuesday. In the European session, USD/JPY is trading at 144.76, up 0.17% on the day at the time of writing.
BoJ Core CPI slips to 1.8%
Is Japanese inflation falling? On Tuesday, two inflation indicators pointed to a deceleration in inflation in July. BoJ Core CPI, which is closely monitored by the Bank of Japan, dropped to 1.8%, down from 2.1% in June and its lowest level in three months. The Services Producer Price Index dropped to 2.8%, down from a revised 3.1% in June.
Japan’s inflation has been moving higher, which has supported the case for another rate hike from the Bank of Japan. The central bank has projected that inflation will hover around its 2% target until 2027. Today’s inflation releases could be temporary blips but if the next inflation reports also indicate that inflation is heading lower, it could complicate the BoJ’s plans to gradually normalize its ultra-loose policy.
The International Monetary Fund said on Friday that it supports the BoJ’s move to normalization and that the speed of further rate hikes will be ‘very data-dependent”, with a focus on inflation, wage growth and inflation expectations. We’ll get a look at Tokyo Core CPI on Friday, which is expected to remain unchanged at 2.2%.
The Jackson Hole Symposium was “mission accomplished” for the markets as Federal Chair Jerome Powell signaled that the Fed was ready to cut rates. Powell didn’t specify the September meeting as the kickoff for rate cuts, but the markets are confident that the Fed will cut by a quarter-point at the Sept. 18 meeting.
The US releases a key employment report on Sept. 6 and Goldman Sachs has said that if the jobs report is soft again then the Fed could respond with a 50-basis point cut, while a strong jobs release would support a 25-bps move.
USD/JPY technical
USD/JY is testing resistance at 144.98. Above, there is resistance at 145.42.
There is support at 144.21 and 143.77.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
![EUR/USD stays in tight range below 1.1200 after US data](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/usd-eur-banknotes-58361490_XtraSmall.jpg)
EUR/USD stays in tight range below 1.1200 after US data
EUR/USD continues to fluctuate in a narrow band below 1.1200 in the second half of the day on Tuesday. The bearish opening in Wall Street and the upbeat consumer sentiment data from the US support the USD, limiting the pair's upside.
![GBP/USD clings to daily gains above 1.3200](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/iStock-1178148633_XtraSmall.jpg)
GBP/USD clings to daily gains above 1.3200
GBP/USD trades in positive territory above 1.3200 in the American session on Tuesday. The USD benefits from the cautious market mood and better-than-expected CB Consumer Confidence data, capping the pair's gains.
![Gold holds comfortably above $2,500 despite rising US yields](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/stacks-of-gold-bars-19033163_XtraSmall.jpg)
Gold holds comfortably above $2,500 despite rising US yields
Gold holds steady above $2,500 in the second half of the day on Tuesday. The benchmark 10-year US Treasury bond yield gains 1% above 3.8% after upbeat US data, making it difficult for XAU/USD to gather bullish momentum.
![Markets in a waiting pattern with a potential explosion in volatility – Why?](https://editorial.fxstreet.com/images/TechnicalAnalysis/Volatility/difference-thinking-concept-gm479387022-67954927_XtraSmall.jpg)
Markets in a waiting pattern with a potential explosion in volatility – Why?
The weakness of the Dollar tok a breezer but might continue these coming days. il prices steadied further after the strong support level holds the price from falling further. Geopolitical tensions and the end of the month might call for more upside potential here.
![Three fundamentals for the week: Focus on the fragility of the US economy](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Employment/NFP/american-dollar-bills-on-a-stars-and-stripes-flag-28691402_XtraSmall.jpg)
Three fundamentals for the week: Focus on the fragility of the US economy Premium
US Consumer confidence data will provide a gauge of how consumers are feeling. Jobless claims are in focus after Fed Chair Powell's dovish speech. Investors will look to the core PCE index to confirm that inflation is falling.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.