The Japanese yen rose in Asian trade on Thursday against a basket of major rivals, extending gains for the second straight session against the US dollar after major inflation data.
US inflation missed expectations in May, reducing price pressures on Fed policymakers and bolstering the odds of a September Fed rate cut.
The Bank of Japan is convening next week to discuss latest economic policies, with a less than 50% chance of a 0.25% rate hike.
The Price
The USD/JPY price fell 0.55% today to 143.72, with a session-high at 144.54.
The yen rose 0.25% on Wednesday against the dollar, the second profit in three days away from a two-week trough at 145.46.
US Rates
Recent data showed US inflation rose less than expected in May, with limited effects so far for Trump’s tariffs on prices.
Following the data, traders raised their estimates for a Federal Reserve rate cut in September.
Now traders await US producer prices data later today to gather even more clues.
Japanese Rates
The Bank of Japan is meeting on June 16-17 to discuss the latest economic developments and suitable policies.
Following recent GDP growth data, the odds of a Bank of Japan 0.25% interest rate hike in June rose from 40% to 45%.
Bank of Japan Deputy Governor Shinichi Uchida said the bank will continue to raise interest rates if the economy recovers from the negative impact of US tariffs, however he still cautioned that the economic outlook remains highly uncertain.
Now traders await more Japanese data on inflation, unemployment, and wages to gather additional clues.
