Steady US PCE inflation data supports USD strength, while weak Tokyo CPI keeps BoJ policy outlook uncertain, pressuring the yen.
The USD/JPY pair remains near 159.20 as the US dollar gains support from April’s steady Core PCE Price Index at 3.3% YoY, reinforcing expectations of prolonged Fed rate hikes. The data underscores persistent inflation concerns, reducing bets on near-term policy easing.
Japan’s Tokyo Core CPI slowed to 1.4% YoY in May, missing the BoJ’s 2% target for a fourth straight month. Factory output rebounded in April, but BoJ Governor Kazuo Ueda warned of potential wage-inflation risks from energy shocks, adding to policy uncertainty.
Technically, USD/JPY trades above its 100-period SMA at 158.48 but faces resistance at 159.36, with the RSI near 49, signaling a neutral stance.