Ella 
USD/JPY traded lower during Thursday’s Asian session as it struggled to extend the previous day’s roughly 140-point rally from the psychological level of 150.00, a more than one-week low. USD/JPY is currently trading around 151.15, down nearly 0.15% on the day, but appears to be struggling to move lower significantly.
The U.S. dollar (USD) is expected to build on its overnight recovery from its lowest since September 1 amid uncertainty over the Federal Reserve’s (Fed) next policy moves. The U.S. inflation report released on Tuesday showed that consumer inflation cooled faster than expected, once again confirming market expectations that the Federal Reserve has completed raising interest rates. That said, inflation remains well above the 2% target, giving the market hope that the U.S. central bank will stick to its hawkish stance.
By contrast, the Bank of Japan is the only major central bank in the world to maintain negative interest rates and so far has shown no sign of exiting decades of unprecedented easing measures. Separately, Wednesday’s report of weak gross domestic product showed Japan’s economy shrank for the first time in three quarters, which should delay the Bank of Japan’s move away from its massive easing of monetary policy. This in turn will weaken the Japanese Yen (JPY) and help prevent USD/JPY from falling.
Still, modest weakness in U.S. stock futures and speculation that Japanese authorities may intervene in foreign exchange markets to stem continued currency depreciation could provide support for the safe-haven yen. This, in turn, may continue to act as resistance for the USD/JPY pair. Meanwhile, a mixed fundamental backdrop requires investors to remain cautious before making aggressive directional bets. Traders are now turning their attention to U.S. economic data, including U.S. initial jobless claims last week, the Philadelphia Fed manufacturing index and industrial production data.
