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USD/JPY slips as US growth and PCE inflation disappoint
USD/JPY was around 162.90, after US GDP growth slowed to 1.5% and the Fed’s preferred PCE measure softened in June.
The Japanese yen strengthened versus the US dollar, with USD/JPY trading around 162.90 and down 0.3% on the day, as the US dollar came under pressure following the Federal Reserve meeting and weaker US economic data, according to FXStreet.
US GDP expanded at a 1.5% annualized pace in the second quarter, below the 2.1% market expectation, with the slowdown tied mainly to declines in government spending plus slower investment and export growth, partly offset by stronger consumer spending, the outlet said.
Inflation data reinforced a gradual disinflation narrative, with the PCE Price Index falling 0.1% month over month in June and the annual rate slowing to 3.7% from 4.1%. Core PCE also eased to 3.3% year over year from 3.4%, while the Fed left its benchmark rate unchanged at 3.5% to 3.75% and kept a hawkish tone.
FXStreet added that attention is now on the Bank of Japan’s decision expected to keep its policy rate at 1.0% on Friday, with investors looking for clues from updated economic projections and Governor Kazuo Ueda’s remarks about whether a rate hike could arrive as early as October or be pushed to December.
Latest closeUSD/JPY 158.89 ▲0.9%