- USD/JPY rises to 153.22, boosted by inflation data and the rise in the DXY.
- US PPI data indicates slower growth in inflation, but fails to curb the US Dollar's upward momentum.
- Fed officials express disappointment over inflation trends, highlighting current economic challenges.
The USD/JPY pair rose during the North American session and remains above 153.00 despite warnings from the Japanese authorities about excessive movements in the Japanese Yen (JPY). Other data from the United States (US) shows that inflation is higher than expected, putting pressure on the Federal Reserve. At the time of writing, trading in the major currencies stood at 153.22, up 0.05%.
Despite Japanese Warnings, USD/JPY Advances as Firmer US Inflation Data Boosts Dollar Strength
The US Dollar (DXY) hits its highest level since November 2023. DXY rises to 105.51, about to test the next resistance seen at 106.06. Wednesday's inflation report led to the dollar's reaction. Meanwhile, the recently revealed Producer Price Index (PPI) was softer compared to the CPI, although it did not weigh on the US Dollar.
The US Department of Labor revealed that the March PPI slowed more than expected, standing at 0.2% monthly, below estimates of 0.3%. In annual figures, the PPI rose 2.1%, below forecasts, exceeding the 1.6% in February, while the core PPI stood at 2.4%, also above estimates and data from the previous month.
With US economic data suggesting the Federal Reserve's job is not done, further strength in the US dollar is seen in the near term. Additionally, US Treasury yields rose more than 20 basis points across the entire yield curve on Wednesday, boosting the outlook for the US currency.
Meanwhile, Federal Reserve officials continued to cross wires. New York Fed President John Williams commented that the latest inflation data has been disappointing and added that the economic outlook is uncertain. Recently, Thomas Barkin of the Richmond Fed added that the latest inflation data does not increase confidence that disinflation is spreading in the economy, raising the question of whether we (the Fed) are seeing a change trending.
On the Japanese front, Finance Minister Suzuki stated that the authorities do not rule out taking measures to address the excessive volatility of the yen. And he added: “We are searching with a high sense of urgency.”
USD/JPY Price Analysis: Technical Outlook
Since USD/JPY has broken through the 153.00 barrier, the next resistance level would be the June 1990 monthly high at 155.78, followed by the April 1990 pivot high at 160.32. On the other hand, intervention risks could send the pair falling towards the next key support levels. First, the Tenkan-Sen at 152.05, followed by the Senkou Span A at 150.97, the Kijun-Sen at 149.89, closely followed by the Senkou Span B at 149.59.
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.
