The USD/JPY is poised to conclude the day and week on a positive note, maintaining a position above the 150.00 figure and recording daily gains of 0.16%, currently trading at 150.16.
In terms of fundamentals, recent data from the United States indicates that inflation may be more persistent than anticipated. The latest Producer Price Index (PPI) report reveals both headline and underlying PPI surpassing consensus and the previous month’s figures. Despite this, the most recent Consumer Sentiment report indicates that Americans remain optimistic about the economic outlook, even though inflation expectations for the next year have been upwardly revised.
Against this backdrop, Federal Reserve officials Bostic and Daly have acknowledged progress on inflation but remain cautious about providing a timetable for interest rate adjustments. Both officials have suggested that patience is necessary before the Federal Reserve initiates any easing cycle.
From a technical perspective, the USD/JPY appears to be neutral to upward biased, having peaked around the 150.00-150.88 area following the release of US inflation figures. To continue on a bullish trajectory, buyers must propel the exchange rate above 151.00, subsequently targeting the November 13 high at 151.91 before testing the 152.00 level.
Conversely, a drop below 150.00 could see the first support at the Tenkan-Sen level of 149.25. Further support levels include the Senkou Span A at 148.43, followed by the 148.00 figure. Additional downside risks may emerge at the Kijun-Sen level at 147.62. Traders are closely monitoring these technical levels as they assess potential market movements.
