Yen Steadies Near 159.00 as Markets Await Crucial PCE Inflation Data

The Japanese yen is trading steadily near the 159.00 level against the US dollar as markets await the release of the US Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge.

The PCE inflation data, scheduled for release later today, will provide crucial signals on the Fed's monetary policy trajectory. A higher-than-expected reading could reinforce expectations that the Fed will keep interest rates elevated for longer, supporting the US dollar and potentially pushing USD/JPY higher.

Conversely, a softer print might revive bets on rate cuts, weighing on the greenback and offering some relief to the yen. The market is pricing in a roughly 60% chance of a Fed rate cut by September, according to CME FedWatch, but this outlook remains sensitive to incoming data.