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Yen steadies near 159 as focus turns to US PCE inflation and GDP

Consensus forecasts call for headline PCE to rise 0.1% month over month in July, while core PCE is expected to increase 0.2%, reinforcing bets on whether the Fed keeps policy on hold.

Reported · Written up by our desk · Major Pairs

The Japanese yen held a firm-to-slightly-higher tone versus the US dollar on Wednesday, trading around 159.00 as FX investors waited for several key US economic releases later in the session, according to FXStreet.

In the USD/JPY market, the pair pulled back from Tuesday’s high of 1.5945, with downside attempts described as contained while price remains above 158.40.

The main catalyst is the July Personal Consumption Expenditures, or PCE, Price Index, which FX analysts said could mirror the softer July CPI and retail sales data, keeping expectations that the Federal Reserve can remain on hold.

Brown Brothers Harriman expects headline PCE to rise 0.1% month over month versus -0.1% in June, to 3.6% year over year, and core PCE to rise 0.2% month over month versus 0.1% in June, to stay at 3.3% year over year, while the first estimate of second-quarter GDP is expected to show growth slowing to a 1.5% annualized rate from 2.1%. In Japan, attention also turns to an advanced Tokyo CPI reading for clues on whether the Bank of Japan is on track for a rate hike in September.

Latest closeUSD/JPY 159.31 ▼0.1%

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