The USD/JPY pair surged past the 154.00 mark due to stronger-than-expected U.S. inflation data, revealing persistent inflation pressures reflected in the 3% rise in the Consumer Price Index (CPI). This data reduces prospects for a Federal Reserve rate cut, contributing to an increase in the 10-year U.S. Treasury yield to over 4.6%. Consequently, the U.S. dollar gained strength against the yen, as the significant interest rate gap and a tight U.S. monetary policy keep dollar demand high, while the Bank of Japan faces challenges despite potential policy adjustments.
The immediate response to stronger-than-expected U.S. inflation data propelled the USD/JPY pair above 154.00, reflecting ongoing concerns surrounding inflation and monetary policy.
The rise in Consumer Price Index (CPI) to 3% signals persistent inflationary pressures, diminishing the prospect of a Federal Reserve rate cut in the near future.
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