The Japanese yen is in negative territory on Friday. In the European session, USD/JPY is trading at 143.45, up 0.59% on the day.
Tokyo Core CPI rises to 3.4%
Tokyo Core CPI rose to 3.4% y/y in April, its highest level since April 2023. This was sharply higher from the 2.4% gain in March and beat the market estimate of 3.2%. The spike was driven by a reduction in government energy subsidies as well as hikes in food prices. The price of rice, a staple food, has skyrocketed by 93% in the past year and grain prices have jumped 25% during that time. Tokyo CPI also surged to 3.5% from 2.9% in March.
BoJ in wait-and-see-mode
The Bank of Japan won't be able to ignore these hot inflation numbers and is expected to raise interest rates. The BoJ doesn't like to telegraph its intentions and the timeline of another hike is unclear. The central bank will likely hold rates at next week's meeting and the markets are looking at a rate hike in June or July.
US tariffs have complicated matters for the Bank of Japan and could delay the next rate hike. President Trump's trade policy has been erratic and it's still unclear whether he will reduce tariffs against China and other countries. BoJ policy makers are in a wait-and-see stance and hoping that US trade policy will be more clear in the coming months.
Markets bracing for weak US consumer sentiment, inflation expectations
The US wraps up the week with consumer sentiment and inflation expectations. The UoM consumer sentiment index slipped to 50.8 in April, down from 57.0 in March and the lowest level since June 2022. The final estimate is expected to confirm the weak initial release.
Consumers are expecting a jump in inflation, with the UoM inflation expectations hitting 6.7% in April in the initial release, up from 5.0% in March. The final estimate is expected to confirm the initial reading. This would mark the steepest inflation expectations since November 1981.
USD/JPY technical
- USD/JPY has pushed above resistance at 143.032 and is testing resistance at 143.42. Next, there is resistance at 144.01.
- 142.44 and 142.05 are the next support levels.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD keeps the bullish tone around 1.1260
EUR/USD now manages to regain upside impulse and revisits the 1.1260 zone on Tuesday. The resurgence of the selling pressure continues to hurt the US Dollar amid fresh concerns over the US economy and unabated uncertainty stemming from the US trade policy.
GBP/USD pulls away from daily highs, trades below 1.3350
GBP/USD declines after rising toward 1.3400 earlier in the day and trades below 1.3350 in the American session. The US Dollar holds its ground following Monday's slide, causing the pair to stretch lower. Ahead of Wednesday's UK inflation data, investors will pay close attention to comments from central bankers.
Gold clings to small daily gains above $3,200
Gold fluctuates in a narrow channel above $3,200 on Tuesday after posting small gains to start the week. While the risk-averse market atmosphere helps XAU/USD hold its ground, the Fed's cautious tone on policy easing doesn't allow the pair to gain traction.
Bitcoin fails to reach all-time high despite building institutional and state support
Bitcoin price stabilizes around $105,200 on Tuesday, just 4% shy of its all-time high at $109,588. JPMorgan CEO Jamie Dimon says the bank will let clients buy Bitcoin.The Texas House is set to conduct a second reading of a bill that, if passed, would establish a Bitcoin Reserve.
China April slowdown shows the impact of economic uncertainty
Trade war uncertainty is denting Chinese confidence, resulting in slower economic activity in April. Retail sales and fixed-asset investment both underperformed forecasts amid heightened caution. Yet the impact on manufacturing was less than feared.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.