USD/JPY prepares for a fresh upside above 143.50 ahead of key inflation data

• USD/JPY gathers strength for a fresh upside amid cautious market mood ahead of US CPI data.
• S&P500 is expected to open on a bearish note, following negative cues from overnight futures.
• Fed Harker said the central bank is at the point where it can be patient and hold rates steady.

The USD/JPY pair gathers strength around 143.00 for a fresh north-side move in the early New York session. The asset is expected to continue to rally after a short-term break as the US Dollar strengthens ahead of the United States Consumer Price Index (CPI) data, which will be published on Thursday at 12:30 GMT.

S&P500 is expected to open on a bearish note, following negative cues from overnight futures. The US Dollar Index (DXY) prints a fresh three-day high at 102.70 and is expected to continue its momentum amid an upbeat market mood. Market sentiment dampens as investors seem cautious ahead of the US inflation data.

Investors hope for a recovery in the US headline inflation as global oil prices recovered strongly in July. This would force Federal Reserve (Fed) policymakers to consider the continuation of its aggressive rate-tightening spell. One more interest rate hike from the Fed would push interest rates to 5.50-5.75%.

Meanwhile, Philadelphia Fed Bank President Patrick Harker delivers a neutral commentary on the interest rate outlook. The Fed is at the point where it can be patient and hold rates steady and let the monetary policy actions yet made do their work”.

On the Japanese Yen front, the Bank of Japan’s (BoJ) Summary of Opinions for July’s monetary policy conveyed one member said the achievement of 2% inflation in a sustainable and stable manner seems to have clearly come in sight. The BoJ provided more flexibility to the Yield Curve Control (YCC), which will result in a contraction in bond-buying operations.