- USD/JPY oscillates below 145.00 as the focus has shifted to US ISM Services PMI data.
- More development on the Japan-North Korea tension story will display the forward outlook.
- The headline Tokyo CPI slipped to 2.8%, while the core catalyst improved to 1.7%.
The USD/JPY pair displays a lackluster performance after picking bids to near 144.40 in the Tokyo session. For the past week, the asset has been showing back-and-forth moves in a 144.00-145.35 range amid the unavailability of a potential trigger. The investing community knows that the US dollar index (DXY) has been auctioning on a negative trajectory for the past week. However, the USD/JPY asset has remained sideways, which indicates that the yen bulls are extremely weak.
The yen bulls are expected to weaken further amid escalating Japan-North Korea tensions as North Korean leader Kim Jong-un is firing ballistic missiles over Japan. The attack was near the Japanese region, which forced the administration to make security alerts and urged households to take shelter.
In retaliation, Japan's Prime Minister Fumio Kishida cited the launch as ‘violent behavior’. While Japan’s defense minister Yasukazu Hamada has cleared that Tokyo would not rule out any options to strengthen its defenses including "counterattack capabilities", reported BBC news.
In early Asia, Tokyo Consumer Price Index (CPI) data didn’t make much impact on the major. The headline CPI remained lower at 2.8% than the projections of 3.0% and the prior release of 2.9%. While the core CPI that excludes food and energy escalated to 1.7% vs. the expectations of 1.5% and the prior print of 1.4%.
Meanwhile, the US dollar index (DXY) is awaiting the release of the US ISM Services PMI data. The economic data is seen lower at 56 vs. the previous reading of 56.9. Also, the New Orders Index data will trim significantly to 58.9 against the prior release of 61.8.
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