USD/JPY Holds Above 160.00 as Markets Consolidate Ahead of US CPI

USD/JPY continues to trade above the critical 160.00 level as forex markets consolidate ahead of the upcoming US Consumer Price Index release. The US May NFIB small business optimism index came in at 95.3, missing the expected 96.0, reflecting slightly softer sentiment among small businesses. Goldman Sachs has removed its forecast for a Federal Reserve rate cut this year, reinforcing a hawkish USD outlook. German industrial production rebounded in April, driven by higher energy and construction output, providing modest support for the euro. The Indian Rupee maintains a bearish bias amid a prolonged US-Iran stalemate and persistent hawkish Fed risk. Traders appear to be looking beyond an imminent Bank of Japan rate hike, keeping USD/JPY elevated despite the anticipated policy tightening from Tokyo. Key FX option expiries are also influencing intraday price action. With US CPI data looming as the primary catalyst, traders should monitor the 160.00 support level closely, as a hot inflation print could propel the pair higher while a soft reading may trigger a reversal toward 159.00.