Japanese Yen gains modestly against the US Dollar after US PCE data meets expectations
- USD/JPY comes under pressure as the US Dollar eases after the US PCE data broadly meet expectations.
- Markets trim September Fed rate-hike bets after the inflation report.
- Tokyo CPI data on Friday could provide fresh guidance on the timing of the BoJ's next rate hike.
USD/JPY trades slightly lower on Thursday as the US Dollar (USD) eases after the latest US Personal Consumption Expenditures (PCE) data broadly matched market expectations. Still, the Japanese Yen (JPY) remains pinned near its 40-year lows. At the time of writing, the pair trades around 161.75.
Data from the US Bureau of Economic Analysis showed that the core Personal Consumption Expenditures (PCE) Price Index rose to 3.4% YoY in May from 3.3% in April. On a monthly basis, core PCE held steady at 0.3%. Meanwhile, headline PCE accelerated to 4.1% YoY from 3.8%, marking its highest annual reading since April 2023.
Traders looked past the sharp increase in headline PCE, focusing instead on the modest rise in core PCE and the steady monthly reading. Following the data release, traders scaled back expectations for a September Fed rate hike, with the probability falling to 60% from 67% before the inflation report, according to the CME FedWatch Tool.
The US Dollar gave back a small portion of its recent gains following the data. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, traded around 101.40 after climbing to a more than one-year high near 101.80 on Wednesday.
However, the US Dollar's downside appears limited as stronger first-quarter GDP growth and lower-than-expected Initial Jobless Claims highlighted the resilience of the US economy, reinforcing expectations that the Federal Reserve can afford to keep monetary policy restrictive.
Meanwhile, expectations that the Bank of Japan (BoJ) will continue to normalize monetary policy have done little to support the Japanese Yen. The wide interest-rate differential between the BoJ and the Fed continues to act as a headwind.
Even so, the Yen's persistent weakness above the 160.00 threshold keeps intervention risks elevated, limiting stronger upside moves in USD/JPY in the near term.
Attention now turns to Friday's Tokyo Consumer Price Index (CPI) report as traders look for clearer signals on when the BoJ could deliver its next rate hike.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.26% | -0.08% | -0.21% | -0.13% | -0.03% | -0.25% | |
| EUR | 0.12% | -0.12% | 0.06% | -0.07% | 0.01% | 0.13% | -0.12% | |
| GBP | 0.26% | 0.12% | 0.17% | 0.08% | 0.13% | 0.26% | -0.00% | |
| JPY | 0.08% | -0.06% | -0.17% | -0.14% | -0.07% | 0.03% | -0.20% | |
| CAD | 0.21% | 0.07% | -0.08% | 0.14% | 0.06% | 0.20% | -0.07% | |
| AUD | 0.13% | -0.01% | -0.13% | 0.07% | -0.06% | 0.11% | -0.11% | |
| NZD | 0.03% | -0.13% | -0.26% | -0.03% | -0.20% | -0.11% | -0.27% | |
| CHF | 0.25% | 0.12% | 0.00% | 0.20% | 0.07% | 0.11% | 0.27% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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