USD/JPY consolidates above 151.00 ahead of US core PCE inflation.

• USD/JPY wavers above 151.00 awaiting the Fed's preferred inflation gauge.
• Risk currencies face uncertainty ahead of February US Core PCE release.
• Investors need more clarity on the BoJ's intervention to support the Japanese Yen.

The pair USD/JPY moves sideways in a tight range around 151.30 during the European session on Thursday. The pair is expected to remain stuck in a tight range as investors are expected to open new positions after getting more clarity on the Bank of Japan's currency intervention plans to support the weakening of the Japanese yen. Additionally, U.S. personal consumption expenditure (PCE) price index data, due out on Friday, is expected to keep investors on the sidelines.

The core PCE inflation indicator is expected to have grown at a sustained rate of 2.8% year-on-year. Regarding monthly core inflation, a slow increase of 0.3% is expected, compared to 0.4% in January. Investors will focus on inflation data to gauge when the Federal Reserve (Fed) may begin cutting interest rates.

A specific action of assets is observed in global markets, since Risk-sensitive currencies have been strongly affected by uncertainty over the February US core PCE. Meanwhile, S&P 500 futures remain unchanged. US Dollar Index DXY refreshes six-week highs at 104.72. The 10-year US Treasury yield has rebounded to 4.23%.

The US Dollar (USD) strengthens as Fed Governor Christopher Waller's comment on interest rate guidance negatively impacts the Fed's expectations for rate cuts at the June meeting. Waller said there is no need to rush for policy rate cuts due to persistent price pressures. and a strong economic outlook. Waller added: “Expected further progress in reducing inflation will 'make it appropriate' for the Fed to begin reducing the target range for the federal funds rate this year,” Reuters reported.

Expectations of BoJ intervention in currencies have increased, as investors are wary that the Japanese central bank will not be able to press ahead with positive interest rates due to uncertain wage growth prospects. However, the summary of views from the BoJ's March meeting, released on Thursday, showed that many policymakers saw the need to go slowly in phasing out ultra-loose monetary policy, Reuters reported.