JPY – US inflation data bolstered expectations of a rate cut, weighing on the dollar

The dollar rose before retreating last week. Trump's increased influence on monetary policy and his attempt to fire Fed Governor Tim Cook put further pressure on the currency. Cook filed a lawsuit last Thursday, arguing that Trump lacked the power to remove her. Data released Thursday showed a decrease in US initial jobless claims and stronger-than-expected GDP growth, which briefly narrowed the dollar's decline, but subsequently remained largely unchanged. Data released Friday showed that the US core PCE price index rose 0.3% month-over-month in July, unchanged from the previous month and in line with market expectations. The core PCE price index rose 2.9% year-over-year, a five-month high. The PCE price index rose 0.2% month-over-month in July, in line with expectations, and remained stable at 2.6% year-over-year. The inflation data reinforced expectations of a September Fed rate cut. Traders raised the probability of a 25 basis point cut at the Fed's September policy meeting from 85% before the data release to around 90%, and the dollar subsequently came under pressure.

The Japanese yen continued to trade between 146.64 and 148.18 last week. The yen remains in a bearish pattern, awaiting a breakout from the range. The current support levels for the Japanese yen are 147.40 and 148.90, and the resistance levels are 146 and 145.50.

Forecast Range:
Resistance: 148.00 - 150.00 - 151.22 - 152.00
Support: 146.50 - 145.50 - 145.00 - 142.66

Any questions? contact our professional analysis team