The American inflation figures were in favor of the dollar's gains and the Bank of Japan's accommodative policy continued. The bulls had a good opportunity to move the USD/JPY currency pair higher with gains towards the resistance level of 147.74. This was before settling around the level of 147.40 at the beginning of today's session, Thursday ahead of a new round of Important American economic data. The rise in gas prices led to a rise in the inflation rate in the United States of America in August, but most other costs rose at a more modest pace, which is evidence that increases in consumer prices in general are still cool.
In a set of conflicting data on Wednesday, the Labor Department said the US consumer price index rose 3.7 percent in August from a year ago, compared with an annual pace of 3.2 percent in July. However, excluding volatile food and energy categories, core prices rose 4.3 percent, down from 4.7 percent in July, the smallest increase in nearly two years. This remains far from the US Federal Reserve Bank's target of 2%.
Despite the seemingly disparate numbers, the decline in the core measure could add to optimism that inflation is under control. The Fed tracks core rates closely because it is seen as a better indicator of future inflation trends. Yesterday's numbers also increase the possibility that the Federal Reserve Bank will skip raising American interest rates at its meeting next week. While higher gas prices could lead to higher inflation this month as well, most economists expect US inflation to slowly decline through the end of the year.
On a monthly basis, consumer prices jumped 0.6 percent in August, the biggest increase in more than a year. Gas prices rose nearly 11 percent in August, though they've leveled off since then: According to AAA, the average pump price nationwide was $3.84 on Tuesday, little changed from a month ago.
Expectations of the dollar against the Japanese yen today:
- There is no change in my technical point of view for the performance of the price of the currency pair USD/JPY.
- The general trend is still upward.
- The opportunity to move towards the psychological resistance of 150.00 is coming strongly in case the rest of the American data comes in today with a stronger result supporting a further tightening of the Federal Reserve Bank's policy.
Today is the announcement of US retail sales figures and the producer price index and the number of weekly jobless claims.
Investors ignore the arrival of technical indicators towards strong saturation levels by buying as long as the currency pair's strength factors remain, and a break will not occur without Japanese intervention in the markets to prevent further collapse of the Japanese yen price. Therefore, I still prefer to buy currency pairs from each bearish level in the near term.
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