USD/JPY Trends: US CPI Report in Focus
Shifting to the US, the crucial US CPI Report will impact US dollar demand and the USD/JPY pair’s trajectory. Economists expect the core inflation rate to ease from 3.2% in December to 3.1% in January.
A softer reading may revive expectations of an H1 2025 Fed rate cut, potentially dragging the USD/JPY pair below 200-day EMA, targeting the 149.358 support level. Conversely, a pickup in inflationary pressures would likely reduce bets on a Fed rate cut. This could push the pair above 153, with the 50-day EMA a potential upside target.
Beyond the data, Fed Chair Powell will deliver a second day of testimony on Capitol Hill. Any deviation from Tuesday’s script needs consideration.
