The USD/JPY pair gains traction to near 160.25 during the early Asian session on Friday.
Hotter-than-expected US Producer Price Index (PPI) data provides some support to the US Dollar (USD) against the Japanese Yen (JPY)
Traders will keep an eye on the preliminary reading of the Michigan Consumer Sentiment Index for June, which is due later in the day. Data released by the US Bureau of Labor Statistics on Thursday showed that the US Producer Price Index (PPI) climbed 6.5% YoY in May, compared to 5.7% in April. This figure came in above the market expectation of 6.4% and registered its highest level since November 2022.
On a monthly basis, the PPI rose by 1.1%, compared to the market consensus of 0.7%. This report has reinforced a “higher for longer” stance from the US Federal Reserve (Fed), which could lift the Greenback in the near term. “The Fed is clearly missing its inflation target by a lot more than it is missing its employment objective,” said John Ryding, chief economic advisor at Brean Capital. “The PPI report should further embolden those on the FOMC who think a rate hike might be needed later in the year,” Ryding added. Markets are on high alert as USD/JPY hovers near the critical 160.00 threshold, the level seen as a trigger for official intervention.