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Yen slips as USD firms after US PCE inflation data

USD/JPY is around 159.4 after the US PCE Price Index rose 0.2% month over month in July, above the 0.1% forecast.

Reported · Written up by our desk · Major Pairs

The Japanese yen weakened against the US dollar on Wednesday after traders reacted to the latest US inflation report. USD/JPY was trading around 159.41, after an intraday low near 158.88, as the dollar firmed following the Personal Consumption Expenditures, or PCE, data.

FXStreet reported that the headline PCE Price Index increased 0.2% month over month in July, above the 0.1% forecast and a reversal from June’s 0.1% decline. On an annual basis, headline inflation held steady at 3.7%, while core PCE rose 0.2% month over month and annual core inflation was unchanged at 3.3%.

The US Dollar Index, which tracks the greenback versus a basket of major currencies, was around 99.17, up roughly 0.25% on the day. According to the CME FedWatch Tool, markets assign a 65% chance the Fed will leave interest rates unchanged in September.

Looking ahead, FXStreet said attention is turning to Fed Chair Kevin Warsh’s speech at the Jackson Hole Symposium on Friday for policy signals. Meanwhile, expectations remain high for the Bank of Japan to raise rates at its September meeting, though the report noted concerns about Japan’s fiscal outlook continue to weigh on the yen, limiting support from any rate-hike expectations.

Latest closeUSD/JPY 159.31 ▼0.1%|Dollar index 99.64 ▼0.3%

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