USD/JPY braces for a further rally above 143.50 ahead of key inflation data

• USD/JPY strengthens for another rise amid market caution ahead of US CPI data.
• The S&P 500 is expected to open lower, following negative signals from futures overnight.
• The Fed’s Harker said the central bank is at the point where it can be patient and hold rates steady.

The pair USD/JPY It strengthens around 143.00 for a new movement to the north in the early bars of the New York session. The Yen is expected to continue higher after a short-term breakout, as the Dollar strengthens ahead of the US Consumer Price Index (CPI) data, which is due to be released on Thursday at 12:30 GMT.

The S&P 500 is expected to open lower, following negative signals from futures overnight. The Dollar Index (DXY) posts a fresh three-day high at 102.70 and is expected to continue its momentum amid an upbeat market mood. Market sentiment subsides as investors remain cautious awaiting US inflation data.

Investors expect a recovery in US headline inflation as global oil prices rebounded strongly in July. This would force policy makers at the Federal Reserve (Fed) to consider continuing its aggressive streak of rate tightening. A new rise in interest rates by the Fed would place interest rates between 5.50 and 5.75%.

For his part, Philadelphia Fed President Patrick Harker offers a neutral comment on the interest rate outlook. The Fed is at a point where they can be patient and hold rates steady and let the monetary policy actions that have been taken do their job.”

On the Japanese yen front, the Bank of Japan’s (BoJ) summary of views on monetary policy for July conveyed that one of its members stated that achieving 2% inflation on a sustainable and stable basis appears to be clearly within reach. the view. The BOJ gave more flexibility to yield curve control (YCC), which will result in a contraction of bond buying trades.