USDJPY rallies as dollar gains fresh momentum over weaker yen
The USDJPY pair surged to a fresh high marking its third consecutive day of gains. Despite the release of flat inflation data in the form of the Personal Consumption Expenditures (PCE) index, the US dollar continued its upward march against a weaker yen. The USD/JPY pair has seen quite a bit of action since the U.S. Personal Consumption Expenditures (PCE) data for July was released, showing an annualised rate of 2.6%, unchanged from June. Typically, stable inflation would ease pressure on the local currency, but in this instance, the U.S. dollar has continued to gain strength. In response to the PCE data, the USD/JPY currency pair surged. This rally defies the usual expectation that stable inflation might weaken the dollar, suggesting that other factors are at play.
Read more to find out about the momentum of the USD/JPY currency pair here.
Disclaimer:
Traders should be cautious of thin liquidity and potential volatility spikes, particularly with the U.S. market closed for Labor Day. Any significant moves could be exacerbated by lower trading volumes, making it essential to monitor any sudden shifts in sentiment. As the week progresses, attention will shift to upcoming US economic data, which could provide further clues on the Federal Reserve’s policy direction and influence the trajectory of the U.S. dollar against the yen.
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