The USD to JPY exchange rate surged above 153 following last week’s robust US CPI (Consumer Price Index) numbers, while the Japan CPI is weakening, helping keep the Yen quite soft, thus keeping USD/JPY above 154. Traders were anticipating some price action in response to the Japan national CPI (Producer Price Index) inflation report early today.

USD/JPY Chart H4 – The20 SMA Acting As Support on Dips

The Japanese yen remained relatively stable yesterday, with the USD/JPY pair experiencing minimal movement despite a decrease in Treasury yields. Market participants seem hesitant to push the pair higher, and despite efforts by Japanese authorities to intervene verbally, the 155.00 level remains out of reach for now. However, the chart indicates that buyers still maintain control in the near term.

The current consolidative phase just below the 155.00 level resembles when this forex pair was hovering below the 152.00 barrier. What traders are waiting for is a catalyst or trigger point to provide momentum for the next upward move in the pair. Yesterday, Japan released its March CPI data, which could have potentially served as that catalyst, but it didn’t since it came as expected.

March, Japan’s core CPI came in at 2.6% year-on-year, meeting expectations, while the headline CPI stood at 2.7%, slightly lower than the previous reading of 2.8%. Excluding fresh food and energy, core CPI rose by 2.9%, falling short of the expected 3.0%. Excluding food, core CPI was at 2.5%, unchanged from the previous report.

Japanese March National CPI Report

• Japan March core CPI 2.6% y/y vs. 2.6% expected
• Japan March headline CPI 2.7% vs. 2.8% prior
• The prior report was 2.8% vs 2.2% expected
• Ex fresh food and energy 2.9% vs +3.0% expected
• Excluding food vs 2.5%
• prior Headline CPI m/m +0.3 vs 0.0% prior
• Excluding food m/m +0.2% vs +0.2% prior

USD/JPY Live Chart