USD/JPY looks to reclaim 115.20 amid risk-on sentiment

• USD/JPY is trading lackluster ahead of Thursday's US GDP and Initial Jobless Claims.
• The Asian markets are cautiously optimistic on fewer headlines over the Russia-Ukraine tensions.
• The DXY seesaws as the risk appetite increase superficially.

The USD/JPY pair is hovering around 115.06 heading towards the European open, as investors cheer risk-on market profile amid a lack of discouraging headlines surrounding the Russia-Ukraine crisis. 

Meanwhile, attention turns towards the quarterly Gross Domestic Product (GDP) numbers by the US Bureau of Economic Analysis and Initial Jobless Claims by the US Department of Labor, which are due on Thursday, as the US docket is data-dry this Wednesday. 

The quarterly US GDP numbers and Initial Jobless Claims are expected to land at 6.9% and 235k as per the market estimates against the previous prints of 7% and 248k respectively.

USD/JPY rebounded after hitting the lows of 114.50 on Tuesday, as sanctions from the Western leaders on Russia kicked in. Rumors are that the Federal Reserve (Fed) may not go for an aggressive tightening policy in March’s monetary policy committee (MPC) meeting upon negative developments in the Russia-Ukraine tussle. However, principal sanctions on Russia are likely to push oil prices higher; eventually, it can lead to higher manufacturing costs and off-course the prices of final goods. Therefore, higher inflation expectations may jeopardize the situation for the Fed.

In light of these events, a confused market is keeping the major in a narrow range of 114.99-115.13 in the early European session.

The US dollar index (DXY) is also trading lackluster as Asian markets have rebounded on Wednesday, which has increased the risk appetite of investors superficially.

While the Tokyo Consumer Price Index numbers by the Statistics Bureau of Japan on Thursday will be keenly watched.