USD/JPY Pairs Sours as BoJ Rate Hike Looms
The Japanese yen has surged in recent weeks and is now hovering near its highest level since February. The USD/JPY pair has dropped to 154.17, down sharply from the year-to-date high of 163.96.
Investors are watching several key events closely, including the US consumer price index (CPI) data release on CPI. Economists expect a strong inflation report, with headline CPI rising by 3.4% and core CPI falling to 2.4%. Rising gasoline and diesel prices have contributed to the expected high inflation numbers.
The Federal Reserve is likely to hike interest rates as soon as next week in response to the ongoing war between the US and Iran, which has driven up oil prices. A BoJ rate hike by 25 basis points would help bridge the gap between interest rates in the US and Japan.
The USD/JPY pair's decline is expected to continue, potentially reaching the 50% Fibonacci Retracement level at 152.