Ella 
In Asia, USD/JPY remained below the 145.00 area after retreating from the annual high. USD/JPY is currently trading around 144.90, down 0.05% on the day.
Last Friday, the U.S. Bureau of Labor Statistics reported that the producer price index (PPI), which reflects U.S. final demand, rose 0.8% month-on-month in July, up from 0.1% in June. This figure was higher than the market expectation of 0.7%. Also, the University of Michigan (UoM) consumer sentiment index fell to 71.2 in July from 71.6, beating expectations of 71. Finally, the University of Michigan’s 5-year consumer inflation expectations fell to 2.9% in August from a forecast of 3.0%. USD/JPY saw some follow-through buying after the data. Still, market participants have raised bets that the Federal Reserve (FED) will tighten by a further 25 basis points (bps) by the end of the year. This could therefore support USD/JPY and be a tailwind for the USD/JPY pair.
On the other hand, the Bank of Japan issued an unlimited amount of Japanese Government Bonds (JGB) with a remaining maturity of 5 to 10 years at a fixed rate during early Asian trading on Monday. USD/JPY hit a new daily low near 144.65 after the data, and was down for the first time in six days after hitting a new yearly high earlier in the day.
With no major economic data out of Japan this week, market participants will focus on U.S. retail sales, Fed minutes and comments from Fed officials for clues and direction for USD/JPY. Next week, Japan’s second-quarter gross domestic product (GDP) data will be in focus.
