USD/JPY eyes four-year high near 113.50 on firmer USD

• USD/JPY extends the previous session’s gains on Tuesday.
• US dollar trades near yearly highs at 94.35 with 0.32% gains.
• Fed’s tapering and higher inflation concerns keep USD/JPY elevated.

USD/JPY prints fresh daily gains Tuesday in the early Asian trading session. The pair pierced above 113.00 in the previous session with more than 100-pips movement with the strong greenback gains. At the time of writing, USD/JPY is trading at 113.39, up 0.08% for the day.

The US Dollar Index (DXY), which tracks the performance of the greenback against six major currencies, trades near 94.40 with 0.32% gains. Investors remain concerned about higher energy prices and expectations of the Fed’s tapering timeline. 

On the other hand, the Japanese yen remained on the backfoot after the Bank of Japan (BOJ) survey showed Japanese households expect prices to rise and economic conditions to worsen a year from now. The economy remained in deflation for the 11th straight month in August.

As for now, traders are waiting for Japan’s Producer Price Index (PPI) data, and US JOLTS Job openings to gauge the market sentiment.

USD/JPY additional levels