USD/JPY catches a lift into 149.10 heading into Thursday

• USD/JPY caught a light bid back above the 149.00 handle on Wednesday, but momentum remains thin.
• US PPI, FOMC minutes failed to spark a meaningful drive in the US Dollar as investors await Thursday's CPI release.
• Inflation data to remain the key driver for markets heading into the back half of the trading week.

The USD/JPY reclaimed the 149.00 handle once again in Wednesday trading, and now heads into Thursday's market session looking to hold onto the major level with thin Japan data on the offering for the Asia market window and investors bracing for a fresh printing of US Consumer Price Index (CPI) inflation figures later in the day.

The US Dollar (USD) kicked off Wednesday trading near 148.60, tapping in an early intraday low of 148.42 before recovering steadily throughout the midweek market session, setting a near-term high of 149.32 before settling back into the 149.00 handle.

US Producer Price Index figures broadly beat market expectations, and the Federal Reserve's (Fed) latest meeting minutes release did little to ignite interest in firm USD bidding in either direction.

Forex Today: Dollar remains weak despite PPI and FOMC Minutes, CPI Next

Japan's Producer Price Index (PPI) and Machinery Orders are due at the top of Thursday's trading, but market impact is likely to remain muted.

Japan's PPI for September is forecast to tick down slightly from 0.3% to 0.1%, while Machinery Orders for August are seen rebounding to 0.4% from the previous month's -1.1%.

US CPI inflation figures will be the big showdown for Thursday, and markets are expecting the headline annualized CPI reading for September to edge lower from 3.7% to 3.6%. Inflation expectations are mixing poorly with rising odds of a recession in the US domestic economy in the coming months, and a significant beat for the US CPI will see investors dog-piling back into the US Dollar in short order.

USD/JPY Technical Outlook

The Dollar is up 0.6% against the Yen from the week's low bids, but intraday price action is finding itself hung up along the 200-hour Simple Moving Average (SMA), and the figure to beat for short-term bidders will be last week's peak just beneath 149.60.

The USD/JPY remains firmly entrenched in bullish territory on the longer timeframes, with daily candlesticks still well-supported by the 50-day SMA near 147.00 and the 200-day SMA trading far below current prices, twisting bullish into the 139.00 handle.

USD/JPY Daily Chart

USD/JPY Technical Levels