USD/JPY tumbles below 127.30 as DXY surrenders gains, US PCE and GDP eyed

• USD/JPY has slipped below 127.30 as the DXY has surrendered half of its intraday gains.
• The US PCE and GDP are seen unchanged.
• The BOJ should make efforts to push inflation to 2%.

The USD/JPY pair has slipped lower after oscillating in a narrow range of 127.30-127.44 as investors are awaiting the release of the crucial US economic events, which are due in the American session. Investors are uncertain about the release of the US Personal Consumption Expenditure (PCE) and Gross Domestic Product (GDP) numbers are expected to remain on the sidelines.

As per the market consensus, the US PCE is seen unchanged at 7%, which looks sufficient to keep the greenback in the grip of bulls. The sustainability of the PCE figure at elevated levels is going to soar inflationary pressures further. This will spare no other alternative for the Federal Reserve (Fed) than to keep the monetary policy restrictive. The US dollar index (DXY) is holding itself above 102.00 and may remain higher amid improvement in the safe-haven’s appeal.

Apart from the US PCE, investors will also focus on the GDP numbers. The annualized GDP is seen at -1.4% while the GDP Price Index is expected to land at 8%.

On the Japanese yen front, the yen bulls have not responded much to the comment from Japanese Prime Minister Fumio Kishida that the Bank of Japan (BOJ) should make some efforts to achieve the targeted inflation rate of 2%, as per Reuters. Lower price pressures in the Japanese economy have restricted the growth catalysts, which are hurting yen on a broader note.