Investors await a potential US-Iran agreement while Fed rate cut expectations fade amid rising US inflation.
The USD/JPY pair edged up to 159.10 in European trading, remaining range-bound for a third consecutive session. Sentiment is influenced by reports that the US and Iran have finalized a draft peace proposal, though Tehran insists on retaining uranium stockpiles and control over the Strait of Hormuz.
US inflation accelerated to 3.8% YoY in April, the highest in nearly three years, reinforcing expectations that the Federal Reserve will delay rate cuts. Meanwhile, Japan’s core CPI slowed to 1.4% YoY, missing estimates of 1.7% and adding pressure on the yen.
Technically, the pair remains above its 20-day EMA, with support at 158.65 and resistance at 159.35.