USD/JPY retraces recent losses, hovers above 150.50

• USD/JPY experiences challenges on weaker Japan’s economic data.
• Japan's GDP declined by 0.5% in Q3 against the previous growth of 1.2%.
• Japanese Economy Minister Yasutoshi Nishimura warned about the impact of a global slowdown on Japan's GDP.
• Weaker US inflation reinforces the prevailing sentiment of concluding the rate-hike cycle by the Fed.

USD/JPY recovers recent losses registered in the previous session after the weaker US inflation data release. However, the pair trades higher around 150.60 during the Asian session on Wednesday.

The Japanese Yen (JPY) faces challenges as Japan’s preliminary Gross Domestic Product (GDP) for Q3 showed a decline of 0.5%, swinging from 1.2% growth in the previous quarter. GDP Annualized for the said period contracted by 2.1% against the previous growth of 4.8%.

Japanese Economy Minister Yasutoshi Nishimura has issued a warning about the potential impact of a global slowdown on Japan's Q3 GDP. Nishimura highlighted that domestic demand, including consumption and capital expenditure, lacked strength in the third quarter.

Moreover, the Bank of Japan (BoJ) has reduced the amount of five to 10-year Japanese Government Bonds (JGBs) to ¥575 billion from the previous ¥675 billion. Additionally, the one to three-year JGBs have been adjusted to ¥375 billion from the previous ¥425 billion.

On the other side, the reaction of the weaker US inflation data was certainly impactful, which reinforces the prevailing sentiment that the US Federal Reserve (Fed) is likely to refrain from interest rate hikes in future meetings. This has had an impact on US Treasury yields, adding pressure to the US Dollar (USD).

The US Bureau of Labor Statistics (BLS) disclosed a Consumer Price Index (CPI) for October that was lower than expected, with the annual rate easing to 3.2%, falling short of the anticipated 3.3%. The US Core CPI recorded a modest rise of 0.2%, below the expected 0.3%.

US Producer Price Index and Retail Sales data are scheduled to be released later in the North American session. If these figures align with expectations, it could further amplify the pressure on the Greenback.