USD/JPY attempts a rebound from 133.80, downside looks likely on improved risk appetite
|- USD/JPY is expected to slip further as the negative market sentiment is fading away.
- A rebound in Japanese inflation is contributed mainly by higher oil prices.
- A higher-than-expected US inflation will diminish the demand for risk-perceived assets.
The USD/JPY has witnessed some offers after hitting a low of 133.82 in the Asian session. A minor pullback move after sliding from Thursday’s high at 133.56 looks weak and is expected to resume its downside journey sooner. The asset faced principal selling pressure from 133.56 as it was a weak test of Wednesday’s high.
The pair is expected to remain in the grip of bears as the US dollar index (DXY) has tumbled on Thursday after failing to sustain above 102.60. A rebound in the positive market sentiment has trimmed the DXY’s appeal. The dollar indec has remained in a consolidation phase from the previous two trading sessions after sensing a sell-off near the round-level resistance of 103.00.
Uncertainty over the release of the US inflation is bringing doubtful wild moves in the DXY. Investors are expecting no change in the annual inflation rate. A stable inflation rate at 8.3% might not trim the risk appetite, however, an above-expectation figure will definitely do the honor.
On the Tokyo front, the Bank of Japan (BOJ) is worried over the broader weakness in the Japanese yen. The inflation rate in Japan has reached to its target of 2%, however, higher fossil fuel prices have been the major contributor to the recent surge in the CPI.
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