- USD/JPY moves higher above 158.00 amid firm US Dollar.
- The US Dollar remains firm as the Fed restricts a number of rate cuts this year to one.
- The Japanese Yen remains vulnerable as the BoJ postponed plans of reduction in bond-buying operations.
The USD/JPY pair jumps above 158.00 in Tuesday’s European session. The asset strengthens as the US Dollar (USD) recovers strongly after a modest correction. The US Dollar exhibits a strong performance as Federal Reserve (Fed) policymakers continue to reiterate their projection for only one rate cut this year.
On Monday, Philadelphia Fed Bank President Patrick Harker said he sees one cut in benchmark rates this year if his economic forecast plays out, Reuters reported.
On the contrary, financial markets expect that the Fed will deliver two rate cuts by the year-end. Market speculation for rate cuts twice this year strengthened after the Consumer Price Index (CPI) report for May showed that inflation cooled down at a faster pace. This also increased confidence among investors that the progress in the disinflation process has resumed.
Fed policymakers also acknowledged the soft inflation as encouraging. However, officials said that they want to see inflation declining for months before announcing rate cuts.
Meanwhile, investors shift focus to the United States (US) Retail Sales data for May, which will be published at 12:30 GMT. The US Census Bureau is expected to report an increase in the Retail Sales by 0.3% after remaining flat in April.
On the Tokyo front, the Japanese Yen continues to face selling pressure as the Bank of Japan (BoJ) has pushed plans for reducing bond-buying operations to the July meeting. This has deepened fears of limited scope for policy tightening.
This week, investors will focus on Japan’s National Consumer Price Index (CPI) data for May. Annual National CPI excluding Fresh Food is expected to have accelerated to 2.6% from the prior reading of 2.2%.
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 nears 1.1200 after US PCE inflation data
EUR/USD approaches 1.1200 following generally softer-than-anticipated US inflation-related figures. The pair lacks momentum amid tepid European data undermining demand for the Euro. Still, optimism weighs on the USD.
GBP/USD battles the 1.3400 level for a definitive bullish breakout
GBP/USD advances modestly beyond the 1.3400 level after US PCE inflation data showed price pressures continued to recede in August. Sterling Pound aims for fresh yearly highs beyond the 1.3433 peak posted earlier this week.
Gold hovers around $2,670 as US Dollar resumes decline
Gold price retains its bullish bias near fresh record highs, as demand for the US Dollar remains subdued following US PCE inflation figures. The strong momentum around stocks limits demand for the safe-haven metal.
Week ahead – NFP on tap amid bets of another bold Fed rate cut
Investors see decent chance of another 50bps cut in November. Fed speakers, ISM PMIs and NFP to shape rate cut bets. Eurozone CPI data awaited amid bets for more ECB cuts. China PMIs and BoJ Summary of Opinions also on tap.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.