October 4, 2022 01:16 AM ET
By: AnalysisWatch
The USD/JPY pair showed a lackluster performance after gaining up to 144.40 in Tokyo trading. Last week, it moved back and forth in a range of 144.00-145.35 as there was no potential trigger. The investment community knows that the US Dollar Index (DXY) showed a negative trend last week. However, the USD/JPY pair moved sideways, indicating that the yen bulls are extremely weak.
Yen bulls are expected to weaken further amid escalating tensions between Japan and North Korea after North Korean leader Kim Jong-un fired ballistic missiles over Japan. The attack occurred near the Japanese region, prompting the government to issue security warnings and urge households to seek shelter.
In retaliation, Japan's Prime Minister Fumio Kishida called the firing "violent behavior." Japan's Defense Minister, Yasukazu Hamada, said Tokyo was not ruling out options to bolster its defenses, including "counter-attack capabilities," BBC News reported.
In early Asian trading, Tokyo consumer price index (CPI) data did not have much impact on the major currency. The overall CPI remained at 2.8%, lower than the forecast of 3.0% and the previous release of 2.9%. Core CPI, which excludes food and energy, rose to 1.7%, beating expectations of 1.5% and the previous reading of 1.4%.
Meanwhile, the US dollar index (DXY) awaits the release of the US ISM Services PMI data. The economic data is estimated lower at 56 compared to the previous value of 56.9. Also, the new orders index data is significantly lowered to 58.9 from the previous release of 61.8.
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