💱 USD/JPY Softens to the Lower 146 Range U.S. PPI & Jobless Claims Hold the Key to Next Move

💱 USD/JPY Softens to the Lower 146 Range
U.S. PPI & Jobless Claims Hold the Key to Next Move

📰 Tokyo Market Movements

USD/JPY fell to the lower 146 range.
Drivers:

• U.S. Treasury Secretary Bessent urged a 50 bp rate cut at the September FOMC and suggested further cuts ahead.

• Also requested BOJ Governor Ueda to curb inflation → reigniting speculation over narrowing U.S.–Japan rate differentials → yen-buying pressure.

📊 U.S. Economic Data Backdrop

• U.S. Jobs Report: Previous and prior months’ payrolls were sharply revised down → raising slowdown concerns.

• U.S. CPI (July):

  • Core YoY: +3.1% (higher)

  • Headline YoY: +2.7% (below forecast)
    → Dollar sold on stronger rate-cut expectations.

📅 Key Data Tonight

• U.S. PPI (July): Forecast +2.5% YoY (prev. +2.3%), core +3.0% (prev. +2.6%).

• U.S. Initial Jobless Claims: Forecast 225k (prev. 226k); if continuing claims approach 2 million, it could signal labor market deterioration.

🌍 Other Key Watch Points

• 🇪🇺 Eurozone Industrial Production (June)

• 🇪🇺 Eurozone GDP Revised (Q2)

• 🗣 Fed speeches: Musalem (St. Louis Fed), Barkin (Richmond Fed)

• 💼 U.S. earnings: Applied Materials, Deere, etc.

• U.S.–Russia Talks: Ukraine war & economic cooperation on agenda; joint press conference after leaders’ meeting.

💵 Early London Trade

• Dollar Index: Dropped to 97.632 in Tokyo morning before rebounding to 97.937.

• Yen-led moves → USD/JPY plunged during Tokyo hours; in London, dollar buying returned alongside cross-yen declines.

• GBP/USD saw mixed flows, with dollar strength clashing against UK GDP recovery expectations.

📌 Short-Term Currency Outlook