USD/JPY Strengthens, Hot US PPI Boosts Dollar
USD/JPY strengthened to around 160.25 at the start of the Asian session on Friday (June 12th), supported by the US dollar, which regained strength after higher-than-expected US producer inflation data. This movement indicates that the Japanese yen remains under pressure, especially as markets re-price the possibility of tighter Fed policy.
The US Producer Price Index (PPI) data rose 6.5% year-on-year in May, higher than 5.7% in April and above expectations of 6.4%. On a monthly basis, the PPI rose 1.1%, also exceeding the 0.7% forecast. This figure reinforces the view that inflationary pressures from the producer side remain strong.
For the dollar, the PPI data is a positive catalyst because it supports the Fed's higher-for-longer narrative. If producer inflation remains high, the US central bank could potentially maintain high interest rates for longer or even open up room for a rate hike by the end of the year. This condition makes dollar-based assets more attractive compared to the yen. (Asd)
Source: Newsmaker.id
