USD/JPY Pauses Near Seven-Month Low Ahead of US Inflation Data
The USD/JPY pair has been hovering around the mid-153.00s level on Thursday, showing little movement despite being near a seven-month low. The recent heavy losses have traders looking to US inflation data for guidance, with both the Producer Price Index (PPI) and Consumer Price Index (CPI) reports due out soon. These numbers will provide insight into the Federal Reserve's policy path and influence USD price dynamics.
The US PPI report is set to be released later on Thursday, while the CPI data comes out on Friday. This information will help determine whether the Fed will maintain its current stance or make any adjustments. In the meantime, a more hawkish Bank of Japan (BoJ) repricing might continue to support the Japanese Yen (JPY), capping the currency pair.
From a technical perspective, the recent breakdown below 155.30-155.20 support has been seen as a key trigger for bearish traders. This area coincided with the 38.2% Fibonacci retracement level of the April 2025-July 2026 rally and should cap any meaningful recovery attempt.
The Relative Strength Index (RSI) around 26 signals oversold conditions, while the Moving Average Convergence Divergence (MACD) remains in negative territory. Momentum indicators suggest that downside pressure persists even as the risk of a corrective bounce increases.