USD/JPY Consolidates Ahead of Critical US Inflation Data

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USD/JPY trades within a narrow range near 147.70 as investors await February’s US Producer Price Index (PPI) and Retail Sales figures for fresh insights into the inflation trajectory and Federal Reserve (Fed) policy outlook.

Key Factors:

  • US Data Anticipation: Market focus on PPI and Retail Sales for clues on inflation and potential impact on Fed rate cut expectations.
  • Risk Sentiment: Positive S&P 500 futures suggest improved risk appetite while retreating US Treasury yields weigh on the US Dollar.
  • BoJ Outlook: The Japanese Yen remains pressured amid speculation of delayed exit from negative interest rates.

Technical Outlook:

  • Consolidation Phase: USD/JPY lacks clear direction within a tight range before critical data releases.
  • US Data Impact: Stronger-than-expected figures could boost the US Dollar and USD/JPY, while weaker data could support a pullback.

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