USD/JPY loses traction above 148.00, US data eyed

• USD/JPY remains under selling pressure near 148.45 amid the softer USD and lower yields.
• USD continues to lose steam as the markets believe that the Fed is done with the interest rate hiking cycle.
• The speculation that the BOJ may soon be forced to abandon its negative interest rate policy is growing.
• Traders will focus on the US Housing Price Index, the S&P/Case-Shiller Home Price Indices, and CB Consumer Confidence.

The USD/JPY pair trades in negative territory for the third consecutive day during the early Asian session on Tuesday. The downtick of the pair is backed by the decline in the US Dollar (USD) and the lower US Treasury bond yields. The pair currently trades around 148.45, losing 0.12% on the day.

The Greenback continues to lose steam as the markets believe that the Federal Reserve (Fed) is done with the interest rate hiking cycle. The US October New Home Sales dropped by 5.6% MoM in October to 679K, worse than the market estimation of 725K, the US Census Bureau showed on Monday. Furthermore, the Dallas Fed Manufacturing Index for November declined to -19.9 from -19.2 in the previous reading.

On the Japanese Yen front, Bank of Japan (BoJ) Governor Kazuo Ueda stated on Monday the central bank cannot yet affirm with conviction that inflation will reach its 2% target sustainably and stably.

With inflationary pressures seeming to be more persistent than expected, the speculation that the BOJ may soon be forced to abandon its negative interest rate policy is growing, as well as yield curve control, which set a 0% cap on the 10-year bond yield.

Market players will keep an on the US Housing Price Index, the S&P/Case-Shiller Home Price Indices, CB Consumer Confidence, and the Richmond Fed Manufacturing Index on Tuesday. Additionally, the Fed officials, including Goolsbee, Waller, Bowman, and Barr are set to speak later on Tuesday. Traders will take cues from these figures and find a trading opportunity around the USD/JPY pair.