USD/JPY Weakness Persists with US PPI Unfazed by Higher Tariffs
Data prints coming out of the US continues to drag on the Greenback as higher tariffs seem to be having a limited impact on inflation
Share this:
US Dollar Outlook: USD/JPY
USD/JPY falls to a fresh weekly low (143.19) as the update to US Produce Price Index (CPI) shows the core rate narrowing to 3.0% from 3.2% in April, and the exchange rate may no longer trade within the May range should it fail to defend the rebound from the monthly low (142.38).
USD/JPY Weakness Persists with US PPI Unfazed by Higher Tariffs
Data prints coming out of the US continues to drag on the Greenback as higher tariffs seem to be having a limited impact on inflation, and little indications of a price shock may push the Federal Reserve to further unwind its restrictive policy as the central bank pledges to ‘determine the appropriate stance of monetary policy based on the incoming data, the outlook, and the balance of risks.’
Join David Song for the Weekly Fundamental Market Outlook webinar.
David provides a market overview and takes questions in real-time. Register Here
In turn, the US Dollar may face additional headwinds ahead of Fed rate decision June 18 especially as President Donald Trump states that the ‘Fed should lower one full point,’ and it remains to be seen if the central bank will adjust the forward guidance for monetary policy as Chairman Jerome Powell and Co. are slated to update the Summary of Economic Projections (SEP).
With that said, speculation for lower US interest rates may keep USD/JPY under pressure, but the exchange rate may continue to trade within the May range as long as it defends the rebound from the monthly low (142.38).
USD/JPY Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/JPY on TradingView
- USD/JPY pulls back ahead of 145.90 (50% Fibonacci extension) to register a fresh weekly low (143.19), and a close below the 144.40 (23.6% Fibonacci retracement) to 144.60 (50% Fibonacci extension) region may lead to a test of the monthly low (142.38).
- Failure to defend the rebound from the May low (142.12) may push USD/JPY towards the 140.50 (61.8% Fibonacci retracement) to 141.50 (38.2% Fibonacci extension) zone, with the next area of interest coming in around the April low (139.89).
- Nevertheless, USD/JPY may continue to hold within the May range if it defends the advance from the monthly low (142.38) but need a move/close back above the 144.40 (23.6% Fibonacci retracement) to 144.60 (50% Fibonacci extension) region to bring 145.90 (50% Fibonacci extension) back on the radar.
Additional Market Outlooks
US Dollar Forecast: USD/CHF Falls Toward Monthly Low amid Soft US CPI
US Dollar Forecast: EUR/USD Holds Above Monthly Low Ahead of US CPI
Canadian Dollar Forecast: USD/CAD Coils Within June Opening Range
AUD/USD Climbs Toward Monthly High amid US-China Trade Talk
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
PCE hype now rarely matches market moves
PCE may still matter to policymakers at the Fed, but for traders looking for a genuine volatility event, CPI has been the far more reliable release.
Gold Update XAUUSD struggles for direction near 4k
Although gold has gained close to 1.5% over the last 2 trading sessions, this move does not yet appear to confirm a dominant buying bias. For now, the metal continues to show a more neutral behavior, with demand strength still failing to recover fully after the release of PPI inflation data in the United States.
US Dollar Forecast: PPI Surge Puts 2026 Fed Hike in Play, USD Catch-Up Trade?
US PPI came in FAR above expectations at 1.4% m/m, 6.0% y/y, with Core PPI also beating expectations - will the US Dollar play 'catch up' to Fed rate hike expectations?
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.