Ella 
In early trading in Asia on Wednesday, USD/JPY fell slightly and was around 154.65. A strong U.S. economy and solid inflation data have fueled expectations that the Federal Reserve (Fed) may delay its easing cycle from June to September, providing some support for USD/JPY. However, rising tensions in the Middle East could boost safe-haven assets such as the Japanese yen and limit USD/JPY upside.
Data released by the U.S. Census Bureau on Tuesday showed that U.S. housing starts fell 14.7% in March from a 12.7% increase (revised 10.7%) in February. Building permits fell 4.3% from the previous value of 2.3% (revised 1.9%). Industrial production was in line with market expectations, rising 0.4% monthly in March, compared with a 0.4% gain in February.
Many Fed officials, including Fed Chairman Jerome Powell, have emphasized that interest rate policy will depend on economic data and have not committed to cutting interest rates. Federal Reserve Chairman Jerome Powell said the central bank has yet to see inflation return to its 2% target, indicating it is unlikely to cut interest rates anytime soon.
On the other hand, the Bank of Japan (BoJ) is moving to a more discretionary approach in setting policy, placing less emphasis on inflation. This, in turn, continues to weigh on the yen and “boosts” USD/JPY. Investors will gain fresh momentum as they get more clues when the Bank of Japan releases new quarterly economic growth and price forecasts at its policy meeting on April 25-26.
