Yen Extend Losses Following Japan Inflation Data

Fundamental Analysis

* Yen Falter: The Japanese Yen (JPY) weaken against the greenback following the release of the latest mixed inflation data on Friday. Japan’s National Consumer Price Index (CPI) for June remained steady at 2.8%, matching the previous month’s figure and maintaining its highest level since February. However, Core CPI inflation increased to 2.6%, slightly above the previous reading of 2.5% but just below the consensus estimate of 2.7%. Additionally, comments from Japanese government officials are impacting the market. Japan’s Digital Minister Taro Kono clarified that he is not directly requesting the Bank of Japan (BoJ) to raise rates now, and Finance Minister Shunichi Suzuki stated that he “hopes that politicians should be mindful about making market-related comments due to their impact.”

Technical Analysis

* Technical Breakout: USDJPY was traded higher while currently testing the resistance level 157.55. MACD which illustrate diminishing bearish momentum signal suggest the pair to further extend its gains after it breaks above the level.

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 159.350 after it breach above the level 157.55. Conversely, a potential reversal is also to be expected and the price could head towards 155.550.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Moving ahead, investors will focus on this week, mostly from the U.S due to lack of crucial Japan data, such as US Manufacturing PMI, US GDP and PCE Price Index to gauge further sentiment.

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Monitoring

Stay updated on US and Japan data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.