USD/JPY holds below the 145.00 area as BoJ offers unlimited JGBs at fixed-rate

• USD/JPY trades around 144.90 after retreating from a YTD high in the Asian session.
• US Producer Price Index (PPI) YoY grew by 0.8% in July from 0.1% in June.
• The Bank of Japan (BoJ) offered unlimited JGBs with a maturity of 5–10 years at a fixed rate.
• Investors will monitor US Retail Sales, FOMC Minutes, comments from Fed officials.

The USD/JPY pair holds below the 145.00 area after retreating from a YTD high during the Asian session. The major pair currently trades around 144.90, down 0.05% for the day.

On Friday, the US Bureau of Labour Statistics revealed that the US Producer Price Index (PPI) for final demand YoY rose 0.8% in July from 0.1% in June. The figure was higher than the market expectation of 0.7%. Additionally, the University of Michigan's (UoM) Consumer Confidence Index for July fell to 71.2 from 71.6, better than 71 expected. Finally, UoM 5-year Consumer Inflation Expectations declined to 2.9% for August versus 3.0% estimated and prior. The pair faced some follow-through buying following the data. That said, market players anticipated rising bets for further tightening by the Federal Reserve's (Fed) 25 basis points (bps) by the end of this year. This, in turn, might support the Greenback and act as a tailwind for the USD/JPY pair.

On the other hand, the Bank of Japan (BoJ) offers unlimited Japanese Government Bonds (JGBs) with a residual maturity of 5 to 10 years at a fixed rate in the early Asian session on Monday. Following the data, USD/JPY reaches a new intraday low near 144.65 and posts its first loss in six days after reaching a new yearly high earlier in the day.

In the absence of the top-tier economic data release from Japan this week, market players will focus on US Retail Sales, FOMC Minutes and the comment from the Fed official to take cues and find a clear direction in the USD/JPY pair. Next week, Japan’s Gross Domestic Product (GDP) data from Q2 will be the highlight.