Ella 
The Japanese yen (JPY) rose during the Asian session and reversed some of the previous day’s losses, after data showed on Tuesday that consumer inflation in the Japanese capital Tokyo rebounded from a 22-month low in February. There has been speculation that a new round of substantial wage increases by Japanese companies this year could stimulate consumer spending and demand-driven inflation, opening the door to possible policy normalization by the Bank of Japan (BoJ). In addition, speculation that Japanese authorities will intervene in the market to support the currency, coupled with cautious market sentiment, also supported the risk aversion sentiment in the yen.
On the other hand, the U.S. dollar (USD) continues to struggle to attract meaningful buyers amid growing expectations of an imminent shift in policy stance from the Federal Reserve (Fed). While USD/JPY’s downward trend appears to be easing ahead of key US macro data and Federal Reserve Chairman Jerome Powell’s congressional testimony, this has become a catalyst for a higher tone in USD/JPY. another factor. At the same time, there is a growing belief that the Federal Reserve will keep interest rates higher for longer, which should deter traders from making aggressive directional bets. This, in turn, requires traders to remain cautious before preparing for further downside in the pair.
