The yen weakens against the dollar after US inflation data spurs a reversal in rate-cut expectations, lifting USD/JPY to session highs.
USD/JPY climbed to the mid-159.00s, nearing daily highs after a sharp rebound from around 158.60. The move reflects broader US dollar strength following Wednesday’s US Consumer Price Index (CPI) report, which initially weighed on the greenback before sentiment reversed.
The US Dollar Index (DXY) regained ground in the session, with traders now eyeing Thursday’s Producer Price Index (PPI) data. Expectations point to a sharp slowdown in core wholesale prices year-over-year, which could reinforce disinflation trends and limit the dollar’s upside.
Technical analysis shows USD/JPY at 159.47, holding above key support levels, including the 20-period Simple Moving Average at 158.90. Resistance lies at 159.54, with broader topside capped by the 100-period SMA at 160.65.