The USD/JPY currency pair traded in a muted fashion around the 159.20 region on Friday, as the United States Dollar (USD) found support following the release of the latest US inflation data, while the Japanese Yen (JPY) remained under pressure due to ongoing uncertainty regarding the Bank of Japan’s (BoJ) policy outlook [1]. The US Core Personal Consumption Expenditures (PCE) Price Index, a key inflation gauge, held steady at 3.3% year-over-year in April. This reading reinforced concerns that inflation in the US remains elevated and supported expectations that the Federal Reserve (Fed) could maintain a restrictive monetary policy stance for an extended period [1].
In Japan, the Yen was weighed down by recent domestic data, including the Tokyo Core Consumer Price Index (CPI) inflation, which slowed to 1.4% year-over-year in May. This marks the fourth consecutive month that the Tokyo Core CPI has remained below the BoJ’s 2% target. However, factory output in Japan unexpectedly rebounded in April, providing a mixed signal for the domestic economy [1]. Additional caution emerged after BoJ Governor Kazuo Ueda warned earlier in the week that temporary energy shocks could become more persistent if they begin influencing wages and inflation expectations [1].
From a technical perspective, USD/JPY traded at 159.24, maintaining a neutral stance as it fluctuated between clustered support just below spot and layered resistance overhead. The pair remained above the 100-period Simple Moving Average (SMA) at 158.48, which underpinned the broader uptrend, but was capped by the 20-period SMA at 159.36, aligning with a horizontal barrier at the same level. The Relative Strength Index (RSI) hovered around 49, indicating balanced momentum after recent consolidation, with neither buyers nor sellers in firm control near current levels [1]. Immediate resistance was noted at 159.25 and 159.36, while initial support emerged at 159.20 and 159.10, with the 100-period SMA at 158.48 offering a deeper floor [1].
CONCLUSION
The USD/JPY pair remained range-bound as steady US inflation data supported the Dollar, while the Japanese Yen faced pressure from subdued domestic inflation and policy uncertainty. Market participants are closely watching for any shifts in central bank policy stances, with technical levels suggesting a balanced outlook in the near term.