USD/JPY hits new 34-year highs above 155.00

• USD/JPY advances to 155.00 as the US dollar bounces.
• Durable goods orders in the US increased 2.6% in March.
• The BoJ is expected to raise interest rates just one more time between now and the end of the year.

USD/JPY hit a 34-year high of 155.16 on Wednesday ahead of the release of US durable claims data. After the opening of Wall Street, the pair is trading above 154.96, gaining 0.08% daily. The pair strengthens as the US Dollar finds support amid uncertainty ahead of the US first quarter Gross Domestic Product (GDP) data and the underlying March Personal Consumption Expenditure (PCE) Price Index, which They will publish on Thursday and Friday.

Economic data will significantly influence market expectations about when the Fed will begin cutting interest rates.

Market sentiment is specific, as S&P 500 futures have added some gains in the European session, while risk currencies fall against the US Dollar. The US Dollar Index (DXY) adds some gains after discovering buying interest near 105.70.

On Tuesday, the US Dollar suffered a sharp correction after S&P Global released a weak preliminary US PMI report for the month of April. The agency reported that the manufacturing PMI remains below the 50.0 threshold that indicates a contraction and the services PMI falls sharply. This has suggested that the strong US economic outlook is losing some steam.

Published US durable goods orders showed a 2.6% monthly rise in March, but February's data was revised downward, putting that month's growth at 0.7% compared to the previously published 1.4%. Excluding defense, claims increased 2.3%, exceeding the previous 1.5% but disappointing the 2.5% estimate.

Meanwhile, the Japanese Yen weakens as investors hope that the Bank of Japan (BoJ) will not raise interest rates further this week. Last time, the BoJ brought interest rates to 0%-0.1% after maintaining super-easy monetary policy for 17 years. According to a Reuters poll, the BoJ will tighten policy once again this year and is expected to keep it steady until the June meeting.

Fears of Japanese intervention in the currency field to support the slide of the Japanese yen are accentuated. Earlier in the European session, Ochi, a senior executive in Japan's ruling party, said: “There is no broad consensus at the moment, but if the yen slides further towards 160 or 170 per dollar, that could be considered excessive and could lead to policymakers to consider action,” Reuters reported.