USD/JPY loses ground as US Dollar declines due to the lower US yields.
Tokyo Consumer Price Index data is expected to be released on Friday.
CME FedWatch tool shows the chances of a Fed’s rate cut in March has been dropped to below 40%.
USD/JPY trims some of its intraday gains, hovering around 147.60 during the European trading hours on Thursday. However, the USD/JPY pair attempted to recover the losses registered in the previous session after the release of upbeat United States (US) Purchasing Managers Index (PMI) data. Furthermore, Tokyo Consumer Price Index data will be eyed on Friday.
On Wednesday, the Japanese Yen (JPY) gained strength following the release of better-than-expected Japan’s Merchandise Trade Balance Total for December. Moreover, the Bank of Japan (BoJ) opted to keep its existing interest rates and yield curve control policy intact in its recent meeting on Tuesday. However, BoJ Governor Kazuo Ueda indicated a steadfast commitment to achieving the 2.0% inflation target. Ueda's statements hinted at the possibility of gradually reducing extensive stimulus measures and shifting short-term interest rates out of negative territory as the necessary conditions align.
The US S&P Global PMI rose to an 11-month high of 50.3 in January, surpassing the forecasted value that anticipated it to remain steady at 47.9. Additionally, the US Services PMI exhibited growth, recording a reading of 52.9, which exceeded both the expected figure of 51 and the prior month's reading of 51.4
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