The USD/JPY currency pair has rallied towards the 148.00 level, driven by a decline in safe-haven demand for the Japanese Yen. Improving market sentiment and receding recession fears have boosted investor risk appetite, supporting the US Dollar.
Recent economic data, including a better-than-expected jobless claims report, has tempered concerns about a potential US recession. This shift in market sentiment has contributed to the Yen’s weakness.
Focus on US Inflation Data
The upcoming release of the US Consumer Price Index (CPI) will be a key event for the market, as it will influence expectations for Federal Reserve interest rate cuts. A softer-than-expected CPI reading could further bolster risk appetite and put downward pressure on the Yen.
While today’s Producer Price Index (PPI) data is expected to show a deceleration in inflation, its impact on the US Dollar is likely to be limited compared to the CPI report.