USD/JPY holds steady near 157.50 as Tokyo inflation moderates but stays high
USD/JPY traded sideways around 157.50 during Asian trading as Tokyo's June inflation data showed mixed signals for Bank of Japan policy. Tokyo CPI decelerated to 2.3% year-over-year from 2.5% in May, while core CPI eased to 2.1% from 2.2%, though both measures remain well above the BOJ's 2% target. The persistent inflation keeps alive expectations for potential BOJ policy normalization, limiting yen weakness despite the moderation. Asian equity markets showed resilience with modest gains, reducing demand for the safe-haven yen. The pair found support at 157.20 overnight and faces resistance at 157.80, the week's high. Market focus shifts to next week's BOJ meeting minutes and US PCE inflation data, which could provide clearer direction. Traders remain cautious as the BOJ's gradual shift away from ultra-loose policy continues to support the yen's medium-term outlook.
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