USD/JPY remains lackluster below 144.50 despite upbeat Japanese data

• USD/JPY is oscillating below 144.50 as yen has failed to capitalize on Japanese data.
• A broader improvement has been witnessed in employment, Retail Sales, and Industrial Production data.
• The improved risk appetite of investors is weakening the DXY.

The USD/JPY pair has not responded as expected despite the release of upbeat Japanese employment, Retail Sales, and Industrial Production data. The asset is displaying back-and-forth moves in a range of 144.30-144.84 in the Tokyo session. The major is displaying any signs of a decisive move and is awaiting a potential trigger.

Japan’s Unemployment Rate has remained in line with the estimates of 2.5% but lower than the prior release of 2.6%. While the Jobs/Applicants Ratio has improved to 1.32 vs. the projections of 1.30 and the former print of 1.29.

Meanwhile, the Retail Sales data has improved significantly to 4.1%, higher than the forecast of 2.8% and the prior figure of 2.4%. The retail demand seems upbeat in the Japanese economy, which is a result of the continuous injection of liquidity into the economy by the Bank of Japan (BOJ). The BOJ believes that the economy needs stimulus to revive the growth rate recorded in the pre-pandemic era. Also, Industrial Production has accelerated to 5.1% from a decline of 2% on an annual basis.

BOJ’s continuation of an ultra-dovish monetary policy is constantly resulting in the depreciation of yen. Now, the recent announcement of an unscheduled bond-buying program has weakened yen further.

 Meanwhile, the US dollar index (DXY) is looking to establish below 112.00 amid an improvement in the risk appetite of the market participants. In today’s session, the US Michigan Consumer Sentiment Index (CSI) data will remain in focus. The sentiment data is expected to remain steady at 59.5.