USD/JPY Pair Poised for Bullish Momentum, Targeting 142.000

Yesterday, the USD/JPY pair experienced a decline to around 139.00 but has since shown signs of recovery. Investors anticipate that the Federal Reserve (Fed) will raise interest rates further in order to combat persistent inflation in the United States. As a result, there is optimism that the asset will surpass the significant resistance level of 140.00. Interestingly, despite discussions surrounding the Bank of Japan (BoJ) Governor Kazuo Ueda's consideration of moving away from an ultra-dovish interest rate policy, the Japanese Yen has not gained strength. According to Bloomberg, experts monitoring the BoJ anticipate no policy adjustments in June, as Governor Ueda consistently supports the need for monetary stimulus to maintain inflation above the 2% target. In light of these factors, our outlook suggests a new bullish momentum with a target of 142.000.

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The USD/JPY pair has rebounded from the key support level of 140.00 during the early European session, indicating a potential bullish bias. Investors are eagerly awaiting the Federal Reserve's interest rate decision, scheduled for the late New York session.

S&P500 futures are exhibiting volatility following a positive Tuesday, as investors exercise caution ahead of the Fed's policy announcement. US equities experienced decent buying on Tuesday, driven by softer-than-expected inflation data for May.

The monthly headline inflation in the United States showed a slight increase of 0.1%, falling short of the estimated 0.2% and the previous figure of 0.4%. Additionally, the annualized headline Consumer Price Index (CPI) decreased to 4.0%, surpassing the projected decline to 4.1% from the previous release of 4.9%. The decline in gasoline prices is prominently influencing the headline inflation.

Furthermore, the monthly and annualized core CPI, which excludes the impact of oil and food prices, maintained the expected rates of 0.4% and 5.3%, respectively.

Trade closed: target reached: