USDJPY attempts a rebound near 145.50 amid mix market mood, US CPI buzz

• USDJPY has picked bids around 145.20 as uncertainty soars amid US mid-elections counting.
• A decline in Q3 consumer spending has trimmed short-term inflation expectations.
• Japan officials are discussing an additional budget for economic stimulus and higher taxes for ultra-wealthy individuals.

The USDJPY pair has observed immediate support around 145.20 in the Tokyo session. The downside in the asset below the aforementioned support banks upon anxiety ahead of the US Consumer Price Index (CPI) data, which will release on Thursday.

Meanwhile, the risk impulse is displaying mixed responses as S&P500 futures have turned negative again. Also, the US dollar index (DXY) is defending its seven-week low around 109.35. Similar bets on the 50 basis points (bps) and 75 bps rate expectations in December monetary policy, as per the CME FedWatch tool, have turned the 10-year US Treasury yields sideways around 4.14%.

According to the preliminary estimates, the headline US Consumer Price Index (CPI) is seen lower at 8.0% vs. the prior release of 8.2%. While the core CPI that excludes oil and food prices is expected to decline to 6.5%. It seems that a decline in consumer spending to 1.4% in the second quarter is responsible for inflation-easing projections.

The extent of the rate hike announcement by the Fed chair Jerome Powell will bank upon the size of the change in the price growth levels.

Apart from that, investors are focusing on headlines from US mid-term elections counting. The market’s favorite is Republicans, which could bring political instability in the US economy.

On the Tokyo front, approval of additional economic stimulus by the Japanese administration is still in focus. As reported by Bloomberg, Japan’s Prime Minister Fumio Kishida is set to approve USD198 billion in the additional budget for the economic stimulus plan. The government also “may opt to hike taxes on ultra-wealthy individuals with annual incomes of more than JPY1 billion ($6.8 million).”