- USD/JPY falls from 151.00 amid US Dollar correction.
- Easing Japanese inflation would undermine the BOJ's plans to abandon its dovish policy.
- Christopher Waller says he prefers to delay rate cuts.
The USD/JPY pair faces an intense sell-off from 150.80 in the early stages of the New York session on Friday. The pair has been pressured by the dollar's vertical decline, despite Federal Reserve (Fed) policymakers advocating keeping interest rates at their current level.
Given the bullish results in overnight futures, the S&P 500 is expected to open higher amid improving market sentiment. US Dollar Index (DXY) corrects to 103.80 as safe-haven assets decline in appeal. The 10-year US Treasury yield has fallen to 4.30%.
Fed policymakers are not interested in relaxing their restrictive interest rate stance as they are less convinced that inflation will sustainably return to the 2% target.
On Thursday, Fed Governor Christopher Waller added that he wants to see inflation data for at least a couple of months to judge whether January's stubborn numbers were mere short-term fluctuations or progress on easing has stalled. of inflation towards 2%. Waller added that the risks associated with delaying rate cuts are smaller than acting too quickly.
As for the Japanese Yen, investors await the national Consumer Price Index (CPI) data for January, which will be released on Tuesday. The annual CPI excluding fresh foods is expected to be below 2.0% at 1.8%, compared to the previous reading of 2.3%. This could stop the Bank of Japan's (BOJ) plans to abandon the expansionary policy it has been implementing for a decade.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
