- Japanese Tokyo CPI inflation, US GDP & PCE inflation key data this week.
- Core Tokyo CPI inflation expected to tick higher on Friday.
- Rate cut-hungry investors hope US PCE inflation will hold steady in April.
USD/JPY is treading water ahead of Tuesday’s Pacific market session, holding ground just below the 157.00 handle as investors await key data that will determine the pace of rate cuts from central banks moving forward.
The trading week opened quietly with US markets shuttered on Monday for the Memorial Day holiday, and Tuesday will officially kick off the full trading week for the USD/JPY pair. Data remains thin in the early week, and investors will be keeping one eye out for further Fedspeak from Federal Reserve (Fed) policymakers. Several key Fed heads are due to speak in the early half of the trading week, and officials from the Bank of Japan (BoJ) found little progress in talking up the Yen on Monday.
Japanese Corporate Services Price Index inflation rose faster than expected through the year ended in April, rising 2.8% YoY, expanding faster than the previous period’s 2.3% and accelerating at its fastest pace since 2015.
Japanese Tokyo Consumer Price Index (CPI) inflation is due later this week, with markets expecting a similar uptick in inflationary pressure with Core Tokyo CPI inflation forecast to tick up to 1.9% YoY versus the previous 1.6%.
Read more: Japanese Corporate Service Price Index climbs to 2.8% annually from 2.3%
US Gross Domestic Product (GDP) growth and Personal Consumption Expenditure (PCE) Price Index inflation figures are due in the back half of this week; Thursday’s US quarterly GDP growth is expected to tick down to 1.4% in Q1 compared to the previous 1.6%, while investors are looking for Friday’s Core PCE Price Index inflation is to hold steady at 0.3% MoM.
USD/JPY technical outlook
Despite broad weakness in the Greenback on Monday, the Yen couldn’t find a foothold, keeping USD/JPY hobbled beneath the 157.00 handle. The USD has climbed steadily against the beleaguered JPY, shrugging off a set of suspected “Yenterventions” in recent weeks.
USD/JPY has clawed back over half of the losses incurred following a steep tumble from multi-year highs at 160.32, and the pair remains deep in bull country. USD/JPY has traded on the north side of the 200-day Exponential Moving Average (EMA) at 149.13 since January, and the pair is up over 11% in 2024.
USD/JPY hourly chart
USD/JPY daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.