USD/JPY Trades Sideways as Inflation Fears and Fed Expectations Balance Out

The Japanese Yen held steady on Thursday, trading in the mid-159.00s as opposing forces balanced each other out in the USD/JPY market.

The US Dollar received support from expectations of further Federal Reserve tightening, but this was tempered by signs that inflation is losing momentum following soft producer price data.

Middle East uncertainty added to the cautious mood, limiting sharp moves in either direction for the pair.

On the Japanese side, attention turned to Friday's growth figures, which are expected to show the economy expanding for a third-straight quarter in Q2, supported by solid consumption and capital spending.