Usdjpy rises 0.23% amid anticipations of U.S. inflation data release

USDJPY Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.23%	33.4 Pips
Week to-date	0.22%	31.8 Pips
June	0.75%	108.5 Pips

Upcoming key events (London Time)

Wed 01:30 PM USD CPI Inflation Rate (12-mth)
Thu 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)

What happened lately

The United States is set to release significant economic indicators this week, which could influence the financial markets. On Wednesday, the U.S. will report its Consumer Price Index (CPI) for a 12-month period, a critical measure of inflation. This data point is closely monitored by markets as it provides insight into rising consumer prices and subsequent pressure on the Federal Reserve’s monetary policy decisions. The following day, Thursday, will feature the Producer Price Index (PPI) excluding food and energy sectors, also for a 12-month period. This measure reflects the price changes from the perspective of producers and could offer an early indication of retail inflation trends. Both CPI and PPI reports are considered high-impact events due to their implications on monetary policy, potentially influencing the U.S. dollar’s strength against other currencies.

The USDJPY pair has experienced a slight increase, with a rise of 0.23% to 144.86, indicating some level of consolidation. The pair’s movement has been largely driven by market expectations and sentiment. Anticipation of the U.S. inflation data could lead to increased volatility in the USDJPY pair. If the CPI and PPI figures suggest higher-than-expected inflation, it may prompt expectations of more aggressive interest rate hikes by the Federal Reserve. Such a scenario would likely strengthen the USD, potentially driving the USDJPY higher. Conversely, if the inflation data falls below expectations, it may temper expectations of Federal Reserve tightening, which could exert downward pressure on the USDJPY pair. Traders and investors will be closely watching the upcoming economic events to gauge the future direction of the USD against the Japanese Yen. As a result, USDJPY may experience increased volatility in response to the economic data outcomes this week.

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What can we expect from USDJPY today?

USDJPY on Tuesday rose 0.23% to 144.86. Price is above 9-Day EMA while Stochastic is rising in overbought zone.

Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 144.41 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 145.29 or trades above daily pivot 144.85. While to the downside, the daily low of 144.39 and 144.41 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A break above 145.29 would suggest bullish bias after recent positive movement.

For the week to-date, take note that USDJPY is bullish as the pair continued to trade higher and is up by 0.22% over the past few days.

Key levels to watch out: