The Japanese Yen gains slight support from a softer US Dollar ahead of key US CPI data and Fed testimony.
The USD/JPY pair retreated to 162.30 during the European session, down from session highs near 162.50, as the US Dollar Index (DXY) softened from nearly two-week peaks. The Yen remains near a 40-year low of 162.84 against the USD.
Investors are awaiting US Consumer Price Index (CPI) figures and Federal Reserve Chair testimony, with June CPI expected to ease to 3.8% year-over-year from 4.2% in May. Core CPI is projected to hold steady at 2.9%. Fed Governor Christopher Waller’s recent remarks hinted at potential near-term rate hikes if inflation persists above the 2% target.
Geopolitical tensions in the Middle East, including a US blockade of the Strait of Hormuz, have pushed oil prices higher, adding to inflation concerns.