USD/JPY approaches 145.00 as US PPI rose strongly

• USD/JPY is looking to capture the 145.00 resistance as US PPI grew stronger than expected.
• The US Dollar Index climbs above 102.60 as producers elevated the prices of goods and services at factory gates by 0.3%.
• The Japanese Yen remains under pressure amid an absence of a supportive BoJ policy.

The USD/JPY pair is marching towards the critical resistance of 145.00 in the London session. The asset rallies due to underperformance from the Japanese Yen. The major struggles to continue its four-day winning streak as investors await the United States Producer Price Index (PPI) data for further guidance.

S&P500 futures post some losses in Europe amid caution due to robust US PPI and US President Joe Biden’s ban on some investment in Chinese sensitive technologies. US equities ended on a mixed note on Thursday after US Biden’s prohibition of investment in China offsets the impact of slower-inflation growth.

The US Dollar Index (DXY) climbs above 102.60 as producers elevate the prices of goods and services at factory gates by 0.3% while analysts forecasted a pace of 0.2%. Annual headline PPI rose to 0.8% against surprisingly higher expectations of 0.7%. Headline PPI rose beyond expectations due to a recovery in gasoline prices in July. Also, monthly core PPI grew at a 0.3% pace, higher than estimates of 0.2%.

Investors hope that the Federal Reserve (Fed) could pause the policy tightening spell and keep interest rates steady. Monthly inflation grew at a 0.1% pace in July, which were in line with the Fed’s desired rate of 2%.

On the Tokyo front, the Japanese Yen remains under pressure amid an absence of support from the Bank of Japan (BoJ) policy. Analysts at Commerzbank stated even if the BoJ wanted to start a slow exit from its yield curve control with its current monetary policy that cannot be positive for the Yen due to the lack of transparency.