• USD/JPY retraces its recent gains on subdued the US Dollar.
• The better-than-expected Machinery Orders showed improved business confidence in Japan’s manufacturing industry.
• US markets will observe Monday as a bank holiday on President's Day.

USD/JPY edges lower to near 150.00 during the Asian session on Monday after registering a volatile session in the previous session. The Japanese Yen (JPY) cheers the improved Machinery Orders data from the country. However, the USD/JPY pair soared on better-than-expected Producer Price Index (PPI) data from the United States on Friday. However, gains were trimmed after dovish remarks on the Federal Reserve’s (Fed) policy from James Bullard, former president of the St. Louis Fed.

Japan’s Machinery Orders (MoM) rose by 2.7% against the expected 2.5% in January, swinging from the previous decline of 4.9%. While the YoY improved to -0.7% compared to the anticipated -1.4% and previous decline of -5.0%. These figures showed improved business confidence in Japan’s manufacturing industry.

Over the weekend, Japanese Finance Minister Shunichi Suzuki said in an interview that “The Bank of Japan (BoJ) holds jurisdiction over monetary policy. But there will be a phase when interest rates go up”.

On the other side, former Federal Reserve official James Bullard, speaking at the National Association for Business Economics (NABE) conference, suggested that the Federal Reserve should contemplate reducing interest rates at its March meeting to prevent stifling economic activity due to higher rates.

The US Producer Price Index (PPI) revealed a year-over-year growth of 0.9%, surpassing the expected 0.6% and previous 1.0%. Additionally, the monthly improvement was 0.3%, contrasting the previous decline of 0.1%. However, the preliminary Michigan Consumer Sentiment Index rose to 79.6 from the prior 79.0, falling short of the anticipated reading of 80.0.

In January, the US Core Producer Price Index (YoY) increased by 2.0%, surpassing the expected 1.6% and the previous 1.7%. Meanwhile, the month-on-month (MoM) data indicated a 0.5% rise, compared to the anticipated 0.1% improvement from the prior decline of 0.1%. With US banks closed for the President's Day bank holiday, the market expects minimal movement in the US Dollar.