Ella 
The Japanese yen (JPY)/USD edged higher on Tuesday, supported by slightly stronger-than-expected domestic consumer inflation data. Indeed, Japan’s core CPI beat expectations and reignited bets that the Bank of Japan (BoJ) could end negative interest rates soon, which in turn gave the yen a nice boost. However, the rise lacked bullish conviction amid expectations that a recession in Japan could force the Bank of Japan to delay its plans to tighten monetary policy. This in turn helped USD/JPY attract some bargain hunting around the psychological 150.00 mark and hold steady during Wednesday’s Asian session.
Meanwhile, the U.S. dollar (USD) continues to struggle to gain any meaningful traction amid an impending U.S. government shutdown and weak U.S. durable goods orders. However, with inflation still firm and the U.S. economy showing dynamism, expectations that the Federal Reserve (Fed) will wait until its June policy meeting before cutting interest rates still curb the dollar’s downside. Traders may also prefer to wait for Thursday’s release of the U.S. personal consumption expenditures (PCE) price index to get a sense of the Fed’s path to cutting interest rates. This in turn limits the upside for the USD/JPY pair, so caution is needed before further gains are made.
