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USD/JPY trades sideways as inflation cools and Fed tightening expectations hold

The yen is also likely to react to Japan growth data due Friday, with Japan expected to expand for a third straight quarter in Q2.

Reported · Written up by our desk · Major Pairs

USD/JPY was largely unchanged on Thursday, holding in the mid-159.00s and continuing to consolidate as opposing market forces offset each other, according to FXStreet.

On the US side, expectations for further Federal Reserve tightening stayed steady, providing support for the dollar, but that was tempered by signs that inflation is losing momentum after the week’s soft producer price data, keeping the pair from trending.

FXStreet also pointed to Middle East uncertainty as an additional factor weighing on risk appetite and limiting large moves in either direction.

On the yen side, focus turns to Friday’s Japan growth figures, where the economy is expected to expand for a third straight quarter in Q2, driven by consumption and capital spending, a development that could shift USD/JPY’s near-term path.

Latest closeUSD/JPY 159.42 ▲0.2%

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