USD/JPY eases as softer US CPI caps Dollar gains, Yen demand stays firm

💡 DMK Insight

The JPY’s rebound against the USD signals a potential shift in market sentiment following disappointing US inflation data. Traders should pay close attention to how this impacts USDJPY, especially if the pair approaches key resistance levels. Softer inflation could lead to speculation about the Fed’s next moves, which might keep the dollar under pressure. If the JPY continues to strengthen, we could see a shift in risk appetite, affecting not just USDJPY but also broader forex pairs. Look for any signs of volatility in the coming sessions, particularly around key economic releases that could further influence the dollar’s trajectory. On the flip side, if inflation data turns out to be a one-off, the dollar might regain strength quickly, so keep an eye on the upcoming economic calendar for any surprises that could shift this dynamic.