Ella 
In early trading in Asia on Wednesday, USD/JPY strengthened for the fourth consecutive day and was around 156.55. USD/JPY was boosted by speculation that the Federal Reserve (Fed) may keep interest rates at higher levels longer amid high inflation. However, concerns over possible intervention by Japanese authorities in FX markets could limit USD/JPY’s upside.
Federal Reserve Chairman Jerome Powell reiterated on Tuesday that inflation is slowing slower than expected, with April’s PPI data providing more reason to keep interest rates higher for longer. However, Powell further stated that the Fed is not expected to raise interest rates. Hawkish comments from Federal Reserve officials could boost the U.S. dollar (USD) and boost USD/JPY.
On Tuesday, the U.S. Bureau of Labor Statistics announced that the U.S. producer price index (PPI) increased at an annual rate of 2.2% in April, compared with an increase of 1.8% (revised 2.1%) in March, in line with expectations. Meanwhile, the core producer price index (PPI), which excludes volatile food and energy costs, rose 2.4% year-on-year, compared with a 2.1% gain in March. Both the producer price index and the core producer price index increased 0.5% monthly in April.
