USD/JPY dips as Japan PPI slows to 2.7%, BOJ maintains cautious stance
USD/JPY declined 0.2% to 154.85 as Japan's wholesale inflation cooled to 2.7% year-over-year in October, down from September's revised 2.8%. The Producer Price Index rose 0.4% month-over-month, with falling import costs contributing to the deceleration as the import price index dropped 1.5% annually. This softer inflation data reinforces the Bank of Japan's cautious approach to monetary policy normalization, reducing expectations for aggressive rate hikes. The yen found mild support from the data, though gains remain limited as the BOJ continues to lag behind other major central banks in tightening policy. Technical indicators show USD/JPY testing support at 154.80, with resistance at 155.20. The pair's near-term direction will likely depend on upcoming US inflation data and any shifts in BOJ communication regarding future policy moves.
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