Ella 
The Japanese yen (JPY) strengthened sharply against the U.S. dollar, rising to a more than two-week high on Thursday after Bank of Japan (BoJ) board member Hajime Takata gave the clearest signal of an imminent rate hike. Still, Bank of Japan Governor Kazuo Ueda struck a slightly cautious tone, easing speculation that a shift in policy stance was imminent. Additionally, investors appear to believe that Japan’s recession could force the Bank of Japan to delay plans to exit its ultra-loose policies. This, coupled with the recent extended rebound in equity markets, has limited further gains for the safe-haven yen.
Apart from this, some buying in the greenback lifted USD/JPY around 75 pips from around 149.20 and gained some positive momentum during Friday’s Asian session. Meanwhile, the U.S. personal consumption expenditures (PCE) price index for January was in line with expectations, showing inflation at its lowest annual rate in nearly three years. This reaffirms market bets that the Federal Reserve will begin cutting interest rates at its June policy meeting. This could dissuade USD bulls from making aggressive bets and prevent further gains in USD/JPY.
