USD/JPY gathers strength to print fresh five-month high above 138.00 ahead of Japan’s Inflation

USD/JPY is looking to refresh its five-month high above 138.00 as the BoJ would continue its ultra-dovish policy.
The overall market sentiment has turned positive as a raise in the US borrowing cap seems promising.
Japan’s inflation is expected to soften further due to declining oil prices.

Sagar Dua FXStreet

The USD/JPY pair is gathering strength for printing a fresh five-month high above 138.00 in the Asian session. The asset has got immense strength as the Bank of Japan (BoJ) is expected to continue keeping its monetary policy loose enough to sustain inflationary pressures at elevated levels.

S&P500 futures have generated nominal losses in the Asian session. US equities had a ball on Wednesday as investors are confident that the White House and Republican leaders would agree to a deal of raising the US debt ceiling. This has faded fears of catastrophic effects of a default by the US Treasury in augmenting its obligated payments.

The overall market sentiment has turned positive amid a promising deal for raising the US borrowing cap. However, the approval is coming by compromising spending initiatives for the budget.

The US Dollar Index (DXY) has rebounded to near 102.90, however, the downside seems favored as the Federal Reserve (Fed) is expected to pause its rate-hiking spree.

Meanwhile, the Japanese Yen is expected to remain on the tenterhooks ahead of Japan’s inflation data, which is scheduled for Friday. Japan’s National Consumer Price Index (CPI) data (April) will be keenly watched. Headline CPI is seen softening to 2.5% from the former release of 3.2%. Also, the core inflation is expected to decelerate to 3.4% against the prior figure of 3.8%.

Softening of Japan’s inflation data is going to force the Bank of Japan to continue its ultra-dovish interest rate policy. BoJ Governor Kazuo Ueda is committed to keeping inflation steady above 2%, which needs expansionary monetary policy.

USD/JPY

Overview
Today last price	137.65
Today Daily Change	-0.03
Today Daily Change %	-0.02
Today daily open	137.68

Trends
Daily SMA20	135.16
Daily SMA50	133.75
Daily SMA100	133.01
Daily SMA200	137.07

Levels
Previous Daily High	137.71
Previous Daily Low	136.31
Previous Weekly High	135.77
Previous Weekly Low	133.74
Previous Monthly High	136.56
Previous Monthly Low	130.63
Daily Fibonacci 38.2%	137.18
Daily Fibonacci 61.8%	136.84
Daily Pivot Point S1	136.75
Daily Pivot Point S2	135.83
Daily Pivot Point S3	135.34
Daily Pivot Point R1	138.16
Daily Pivot Point R2	138.64
Daily Pivot Point R3	139.57

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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