The Japanese Yen (JPY) currency pair attracted buyers in today's Asian session, recovering earlier losses near this year's lowest level against the US dollar. A slightly higher Japanese consumer inflation figure fueled speculation of a Bank of Japan (BoJ) policy change and raised investor caution. Along with speculation of market intervention by Japanese authorities to support the JPY as a safe-haven.


Meanwhile, falling US Treasury yields kept the US Dollar (USD) buyers on the defensive and contributed to the bids for USD/JPY. That said, the Federal Reserve’s (Fed) higher interest rate narrative in the long term could weigh on the US Treasury yields and the greenback, warranting caution before taking any positions to avoid a significant depreciation in the pair. Traders may prefer to wait for the release of the US Personal Consumption Expenditures (PCE) Price Index on Thursday.


Daily Market Movers: Yen remains strong on consumer inflation, while US Dollar weakens.


  1. Japan's slightly higher-than-expected inflation fueled speculation of a Bank of Japan policy change, supporting the Japanese Yen.
  2. Statistics Japan reported a 0.1% MoM increase in headline CPI in January, although it slowed from 2.6% YoY to 2.2%.
  3. Details of the report showed Core CPI rose 2% YoY in January, beating estimates of 1.8%.
  4. CPI excluding fresh food and energy slowed to 3.5%, the lowest level in 11 months.
  5. Slowing inflation after a fourth-quarter recession allows the BoJ to stick to loose policy.
  6. The US dollar weakened to near its lowest level since February 2 as US Treasury yields fell, weighing on the USD/JPY pair.
  7. Expectations for the first interest rate cut by the Federal Reserve have been pushed back to June, taking into account high inflation and the resilience of the US economy.
  8. Kansas City Fed President stresses need for patience in inflation fight.
  9. Traders were reluctant to make aggressive bets, waiting for further clues on a US interest rate cut.
  10. Market focus is on the release of the US Personal Consumption Expenditures (PCE) Price Index on Thursday, which could influence the USD.
  11. Traders on Tuesday face the release of US Durable Goods Orders, US Consumer Confidence Index and Richmond Manufacturing Index.
Also Read: 

Dollar to Yen Rate Drops Below 148, Challenges Continue?

Japanese Yen Today Stuck Near Lows Against US Dollar

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