Later in the session, the Philly Fed Manufacturing Index will give insights into the early effects of Trump’s trade policies on production. Economists forecast the Index to rise from -4 in May to -1 in June.
A higher reading could ease concerns about a US recession, given manufacturing contributes around 20% to GDP, boosting US dollar demand. A stronger US dollar may drive USD/JPY toward 146 and the May 29 high of 146.285. Conversely, a softer print may raise expectations of a Q3 Fed rate cut, dragging the pair toward 142.5.
While the manufacturing sector data will influence US dollar appetite, trade developments and news updates from the Middle East will continue driving USD/JPY trends.
