USD/JPY refreshes monthly high above 144.00 as US CPI grows at a slower pace

• USD/JPY jumps swiftly above 144.00 as US inflation grew slower than expected.
• The risk profile remains positive as a nominal growth in US CPI won’t be sufficient to force the Fed to tighten monetary policy further.
• The Japanese Yen remains under pressure amid an absence of support from BoJ policy.

The USD/JPY pair prints a fresh monthly high at 144.28 in the New York session after the release of United States inflation data for July. US Consumer Price Index (CPI) grew at a 0.2% pace in July, similar to the market expectations.

Annual Consumer Price Index (CPI) softened to 4.7% while investors were anticipating a steady figure at 4.8% while headline inflation grew modestly to 3.2% from the prior release of 3.0% but remained marginally below than the consensus of 3.3%.

S&P500 opens on a bullish note as a nominal growth in US inflation won’t be sufficient to force the Federal Reserve (Fed) to tighten monetary policy further. Also, investors digested Moody’s downgrade to small and medium-sized US banks. The credit-rating firm warned that it can downgrade some of the biggest lends ahead. Moody’s delivered reasoning behind its downgrade that higher borrowing costs have impacted banks’ funding potential and their profitability sharply.

The US Dollar Index (DXY) gyrates wildly around 102.00 as investors assess the inflation data for further guidance. Slower-than-expected rebound in the US inflation and hiring slowdown could allow the Federal Reserve (Fed) to keep interest rates steady.

On the Tokyo front, the Japanese Yen remains under pressure amid an absence of support from the Bank of Japan (BoJ) policy. Analysts at Commerzbank stated even if the BoJ wanted to start a slow exit from its yield curve control with its current monetary policy that cannot be positive for the Yen due to the lack of transparency.