USD/JPY seeks support around 135.00 as US Inflation uncertainty improves US Dollar’s appeal

• USD/JPY is eyeing an immediate support near 135.00 as uncertainty over US inflation data would keep USD Index underpinned.
•  US President Joe Biden has invited some top Republican leaders to approve higher relocation for the debt ceiling.
• BoJ Ueda believes that the impact of recent US and European bank failures on Japan's financial system is likely limited.

The USD/JPY pair is looking for a cushion after dropping below the crucial support of 135.00 in the early European session. The major is aiming for a recovery as uncertainty over the United States inflation is accelerating. The US Dollar Index (DXY) has remained sideways in the Asian session and is entering on the same course in Europe ahead of US Consumer Price Index (CPI) data and debt ceiling negotiations.

S&P500 futures have continued their choppy performance in early London as investors have sidelined, portraying a quiet market mood. The outcome of the US debt ceiling talks is expected to bring a power-pack action for US equities.

US President Joe Biden has invited some top Republican leaders and other congressional diplomats to approve higher relocation for the debt ceiling to avoid further delay as it could severely damage the US economy. US Treasury Secretary has already warned that a delay in the debt ceiling raise approval approval Republican House of Representatives Speaker Kevin McCarthy is expected to negotiate heavily on spending initiatives to cut the deepening Budget deficit.

Meanwhile, the US yields have dropped as unfavorable debt ceiling deal would impact the long-term outlook of the US economy. The 10-year US Treasury yields have dropped below 3.5% amid a rebound in demand for government bonds.

On the Japanese Yen front, new Bank of Japan (BoJ) Governor Kazuo Ueda said on Tuesday, “The impact of recent US and European bank failures on Japan's financial system is likely limited.” About inflation guidance, BoJ Ueda cited Japan's inflation expectations have heightened, and remain at elevated levels.