USD/JPY Edges Higher Amid Ongoing Concerns About Fed Rate Hike Bets
The Japanese Yen has retreated from its multi-month top against the US Dollar as traders await the release of US inflation data. The USD/JPY pair edged higher during the Asian session on Thursday, but the upside seems capped due to ongoing concerns about Fed rate hike bets and US-Iran tensions.
Fed rate hike bets and US-Iran tensions are lending support to the US Dollar ahead of the US inflation data release. This has pushed the USD/JPY pair higher during the Asian session on Thursday, but the upside remains capped due to ongoing concerns about Fed rate hike bets and US-Iran tensions.
The Bank of Japan's (BoJ) recent hawkish stance has also underpinned the Japanese Yen, capping gains for spot prices. Traders now seem to have fully priced in a 25-basis-point interest rate hike by the BoJ at its upcoming September 17-18 policy meeting and are assigning a high probability of a follow-up move in December.
The US inflation data release is expected later today, followed by the US Consumer Price Index (CPI) on Friday. This will provide more cues about the Federal Reserve's future policy path. In the meantime, bets that the US central bank will raise borrowing costs later this month, amid inflation risks due to higher energy prices, along with escalating US-Iran tensions, support the USD and the USD/JPY pair.