The USD/JPY pair continues to decline as the US Dollar correction exerts pressure on the pair. During the Asian trading hours on Thursday, the pair was seen trading around 154.30, marking its second successive session of losses. The decline in the US Dollar is primarily responsible for the downward trend in the USD/JPY pair.
Japan’s CPI data is scheduled to be released on Friday, with expectations of a moderation in consumer prices for March. The release of this data could potentially have an impact on the movement of the USD/JPY pair, depending on whether the results meet market expectations.
US President Joe Biden recently called for a tripling of tariffs on Chinese steel and aluminum. This announcement could potentially benefit the Japanese market and provide support for the Japanese Yen. The move is seen as a way to put pressure on the Chinese steel sector and could have far-reaching implications for the global economy.
The Federal Reserve’s stance on maintaining elevated interest rates for an extended period is serving as a counterbalance to the downward pressure on the USD/JPY pair. The robust US economy and persistent inflation are key factors driving this decision. Federal Reserve Bank of Cleveland President Loretta Mester pointed out that inflation has surpassed expectations, and the Fed requires more assurance before confirming the sustainability of 2% inflation. This cautious approach indicates that the Fed is closely monitoring economic indicators before making any significant policy changes.
The USD/JPY pair is facing downward pressure due to the US Dollar correction, Japan’s upcoming CPI data release, and US President Joe Biden’s call for increased tariffs on Chinese steel and aluminum. The Fed’s stance on interest rates and monetary policy adds another layer of complexity to the situation. Traders and investors will be closely monitoring these developments to gauge the impact on the currency markets.