- USD/JPY maintaining the range-bound style around 149.50 on Monday morning
- The Fed’s less hawkish stance is weighing on the Greenback
- Japan’s National Consumer Price Index (CPI) for October increased by 3.3% YoY
Early in the Asian session on Monday, the USD/JPY is displaying a consistent range-bound style around the mid-149.00s. With no significant financial data coming from Japan today, the USD/JPY is largely influenced by USD cost characteristics, currently trading near 149.53, up 0.04% for the day.
Following the November FOMC meeting, it was revealed that the Fed members require more evidence that inflation is cooling before considering it is on a sustainable track down to 2%. This less hawkish stance from the Federal Reserve (Fed) has put downward pressure on the United States Treasury bond yields and is weighing on the Greenback.
Additionally, on Friday, the United States S&P Global Manufacturing PMI fell to 49.4 from 50.0, worse than the expectation of 49.8, while the Services PMI rose to 50.8 from 50.6 the previous month, above the market expectation of 50.4. The Composite PMI remained steady at 50.7 in November.
Meanwhile, Japanese inflation figures indicate that the Bank of Japan (BoJ) is unlikely to seek an exit from its ultra-expansionary monetary policy at the moment. The National Consumer Price Index (CPI) for October increased by 3.3% YoY from 3.0% in September. The National CPI ex Food, Energy eased to 4% YoY from 4.2% in the previous reading. The National CPI ex Fresh Food reached 2.9% versus 2.8% prior.
Traders will be closely monitoring the United States real estate data on Tuesday. And, later on, the focus will shift to the United States growth numbers on Wednesday and Personal Consumption Expenditure (PCE) inflation figures on Thursday. The United States Gross Domestic Product (GDP) Annualized for the 3rd quarter (Q3) is projected to grow to 5%. The United States PCE for October is estimated to drop from 0.4% to 0.1%. These figures could provide a clear direction for the USD/JPY pair.
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