Japanese Yen Fails to Revive Amid Hawkish Sentiment and Upcoming US Inflation Data

The Japanese Yen continues to trade cautiously against the US Dollar as traders await the release of the US Consumer Price Index (CPI) data for July. The USD/JPY pair has edged up to near 159.36, with market expectations pointing to a subdued set of numbers from the CPI report.

Analysts at ING note that consensus is predicting a 0.1% month-on-month increase in headline inflation and a 0.2% rise in core inflation, which would see year-over-year rates drop to 3.4% and 2.5%, respectively, inching closer to the Fed's 2% inflation target.

Meanwhile, DBS economists highlight that the Bank of Japan's (BoJ) communications have turned notably more constructive on tightening, with a hawkish shift in policy expectations.