USD/JPY in the Tokyo market came under pressure and temporarily fell to the mid-¥157s before showing signs of recovering to the ¥158 range. US PPI and retail sales are scheduled for release tonight and will be the market's focus.
USD/JPY came under pressure in the Tokyo market and temporarily fell to around ¥157.58. At the time of writing, the pair had subsequently shown signs of recovering to the ¥158 range. The dollar continued to face resistance on the upside against the backdrop of long-term interest rate movements.
US CPI growth accelerated more than expected, potentially affecting the outlook for interest rates. Although market pricing for an FOMC rate hike has receded to around 30%, the figures for US September PPI and retail sales due tonight will be closely watched. USD/JPY failed to break above its 200-day moving average on a closing basis, and the pair is expected to continue trading sideways in the upper ¥158s.
Tonight's events include the release of US September producer prices (PPI) and US September retail sales, as well as US initial jobless claims and manufacturing indicators. These will provide potential market cues. Broader events, including the G20 Finance Ministers and Central Bank Governors Meeting and the EU summit, have also been cited as factors to watch overnight.
The results of US PPI and retail sales could trigger another move in USD/JPY. Market participants are expected to assess whether short-term risk-off or risk-on moves emerge in response to tonight's figures.