USD/JPY: Yen dips as Japan's inflation hovers at 2-year lows

  • USD/JPY is mildly bid in Asia on rising dovish BOJ expectation.
  • Japan's core inflation remained at two-year lows in July.
  • Sell-off likely if Federal Reserve's Powell sets the stage for a September rate cut.

The Japanese Yen is losing altitude in Asia, possibly due to dismal Japanese inflation data and the resulting rise in the dovish Bank of Japan (BOJ) expectations.

Japan's core consumer price index (CPI), which includes oil products but excludes fresh food prices, rose 0.6% in July year-on-year, as expected, matching the previous month's gain, which was the slowest pace since July 2017. Back then, the core CPI had climbed by 0.5%.

The data will likely add to the pressure on the BOJ to ease further. The Yen has already come under pressure in the last few minutes – USD/JPY is currently trading at 106.50, having hit a low of 106.38 earlier today.

The central bank last month expressed willingness to expand stimulus if a global slowdown derails the progress toward the 2% inflation target.

Focus on Fed's Powell

Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole Symposium later today will be closely watched by the markets.

Investors believe Powell will use the event to set the stage for a 25 basis point rate cut in September.

The USD/JPY pair may find acceptance below 106.00 if Powell sounds dovish, making a U-turn from his statement at the July 31 meeting that the policy is not on a preset easing path.

On the other hand, if Powell remains non-committal, then the US Dollar will likely rise across the board.

Pivot levels

    1. R3 107.05
    2. R2 106.85
    3. R1 106.65
  1. PP 106.45
    1. S1 106.24
    2. S2 106.04
    3. S3 105.84


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD tumbles below 1.10 amid weak German PMIs

EUR/USD has dropped sharply below 1.10 after German Manufacturing PMI dropped to 41.4 and other figures are disappointed. Fears of a recession are mounting. ECB's Draghi speaks later.


GBP/USD trades below 1.25 as markets await a Brexit breakthrough

GBP/USD is trading below 1.25, little changed. PM Johnson has expressed optimism ahead of meetings with EU leaders in New York. The opposition Labour Party's is trying to iron out its position on Brexit. 


USD/JPY: Bulls reasurting themselves amid improved trade sentiment

USD/JPY holds firmer starting out the week, as the optimistic sentiment for trade talks remains on track. However, the further upside remains capped by falling Treasury yields-led broad USD weakness.


Gold climbs to over 1-week tops, around $1520 region

Gold edged higher through the early European session on Monday and is currently placed at over one-week tops, around the $1520 region.

Gold News

Top 3 price prediction Bitcoin, Ripple, Ethereum: Bakkt to the Future

Today is the day – the release of futures on Bitcoin by ICE – owner among others by the all-powerful NYSE. This initiative, channeled through the trading platform Bakkt, will allow trading futures on Bitcoin with delivery to maturity.

Read more