USD/JPY and USD/CHF face pressure after weak CPI drives rate cut bets

USD/JPY declined 1.1% to 149.80 while USD/CHF fell 0.9% to 0.8650 as the US dollar weakened following disappointing inflation data. The softer CPI reading has triggered a significant repricing in interest rate expectations, with the yield curve steepening as traders position for potential Fed easing. The Dollar Index futures dropped to 104.50, testing critical support levels. Safe-haven currencies JPY and CHF are benefiting from both dollar weakness and increased market uncertainty. Technical analysis shows USD/JPY breaking below the 150.00 psychological level and approaching the 200-day moving average at 149.20. USD/CHF has violated its ascending trendline support, with next major support at 0.8600. Market positioning data suggests leveraged funds are increasingly bearish on the dollar, potentially accelerating the downward momentum if key support levels fail to hold.