USD/JPY reclaims 133.00 after mixed January’s US CPI report

• USD/JPY registers gains of 0.50%, above the 133.00 mark.
• US inflation data, albeit mixed, spurred a jump in US Treasury bond yields, a tailwind for the USD/JPY.
• USD/JPY Price Analysis: Daily close above 133.00 would pave the way for further gains.

The USD/JPY reached a new YTD high of 133.13, though it failed to cling to those gains, retracing beneath last week’s high of 132.90 after the release of US economic data, spurring a retracement. Therefore, the USD/JPY consolidates within the 132.70-133.00 area. At the time of writing, exchanges hands at 133.06.

Fundamentally speaking, the Department of Labor (DoL) revealed that inflation in the United States (US) cooled down annually but came slightly above estimates. The Consumer Price Index (CPI) for January rose by 6.4% YoY, above forecasts of 6.2%, while core CPI jumped to 5.6% YoY, against data estimated at 5.5%. Monthly basis readings were in line with estimates.

On the Japanese front, the confirmation of the Bank of Japan’s (BoJ) new Governor, Kazuo Ueda, sparked speculations that the BoJ would abandon the Yield Curve Control (YCC) imposed under Governor Haruhiko Kuroda’s term. Thar should be considered bullish for the Japanese Yen (JPY), which has extended its losses in the North American session so far.

Elsewhere, Federal Reserve (Fed) officials continued to express the need to hike rates for longer than expected, according to Dallas Fed President Lorie Logan. She echoed some earlier comments of Richmond’s Fed President Thomas Barkin, who said that inflation risks still outweigh others.

USD/JPY Technical analysis

After hitting a daily low of 131.49, the USD/JPY encountered some buyers around the latter, rallying sharply towards 133.00, underpinned by the US 10-year Treasury bond yield. To further extend its gains, the USD/JPY needs to clear the 200-day Exponential Moving Average (EMA) at 133.76, which would pave the way to 134.00. In an alternate scenario, the USD/JPY struggling to hold above 133.00 would open the door toward the 50-day EMA At 132.67, ahead of the 132.00 figure.