Anna 
During the Asian trading hours on Wednesday, the USD/JPY pair remained subdued, hovering around 151.70 as market participants awaited the release of the US Consumer Price Index (CPI) data and the Federal Open Market Committee (FOMC) Minutes later in the day.
The Japanese Yen (JPY) may encounter challenges following remarks from Bank of Japan (BoJ) Governor Kazuo Ueda, who stated that monetary policy adjustments would not be made solely to address fluctuations in the foreign exchange market. Governor Ueda emphasized the persistent deflation and low inflation levels in Japan, highlighting the difficulties in influencing public inflation expectations through monetary base expansion. With trend inflation still below the 2% target, it remains imperative to support the economy’s trajectory by maintaining accommodative monetary conditions.
In terms of data releases, Japan’s Producer Price Index (PPI) for March rose by 0.8% year-on-year, meeting expectations and marking the highest reading since October last year. However, the monthly PPI increase of 0.2% fell short of the anticipated 0.3%.
Meanwhile, the US Dollar Index (DXY) endeavored to maintain its position ahead of the release of the US CPI data and FOMC Minutes later in the North American session.
Market expectations suggest that the US headline Consumer Price Index is poised to accelerate in March, while the core measure is anticipated to moderate. The US Dollar remains in a state of anticipation, awaiting potential policy shifts influenced by incoming data. Strong labor market figures from the previous week could lead to a more hawkish stance from the Federal Reserve if inflation surpasses expectations.
As market participants brace for these key data releases, the USD/JPY pair is likely to experience heightened volatility, with traders closely monitoring developments for trading opportunities.
