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The USD/JPY pair rose 0.43% to 147.20 after Bank of Japan Governor Ueda suggested ending negative interest rates. The US 10-year Treasury yield remains steady at 4.292%, bolstering the dollar ahead of August inflation data.
Markets anticipate a rise in the Consumer Price Index from 3.2% to 3.6% YoY, potentially influencing Fed rate decisions. The dollar staged a comeback against the Japanese Yen, but as Tuesday’s US trading session began, the pair is now trading at 147.20.
The US dollar is supported by risk aversion and strong US Treasury bond yields ahead of the release of August inflation data. The US 10-year benchmark note is at 4.292%, while the DXY shows solid gains of 0.30% at 104.83.
The Japanese Government Bond yield reached 0.70% after Governor Ueda’s remarks that the bank could end its negative policy rate if inflation sustainably hits its 2% target. The US Bureau of Labour Statistics will release August’s inflation data on Wednesday, with the Consumer Price Index (CPI) expected to rise from 3.2% to 3.6% YoY, while core CPI to drop from 4.7% to 4.3%.
A higher-than-expected inflation reading could spark speculations about another rate hike by the US Federal Reserve. Money market futures expect no change to the Federal Fund Rates (FFR) for the upcoming Fed meeting on September 21.
