USD/JPY CPI report focus kept the pair rangebound above 160.50 on Monday as traders waited for US inflation data due tomorrow.
The source article said the US dollar has stayed broadly firmer since last week after renewed US-Iran escalation. It added that traffic in the Strait of Hormuz halted again, and oil prices rose sharply. As a result, markets repriced rate expectations in a hawkish way. Chances of a rate hike in July rose to 33%, while total tightening priced for 2026 reached 39 basis points.
Traders are now watching US-Iran headlines, Tuesday’s US CPI report, and Fed Chair Warsh testimony. Meanwhile, the article said an in-line or softer CPI reading may have less impact because geopolitical risk has returned. However, a hotter CPI reading could trigger a broader risk-off move and lift bets on a July rate hike.
USD/JPY CPI Report Keeps Focus on Support
On the yen side, the article said little has changed apart from the renewed US-Iran escalation. It added that threats from Japanese officials to target speculators with stealth interventions helped slow the yen’s depreciation. Therefore, the main near-term driver remains the US inflation report.
According to the article, a stronger-than-expected CPI reading could give USD/JPY another lift. In contrast, a weaker reading could lead to a larger pullback. The source said the pair is consolidating above the 160.50 support zone on the daily chart.
It added that buyers may keep a better risk-to-reward setup near that support while targeting new highs. Sellers, however, would look for a break below 160.50 to add positions for a move toward the major upward trendline near 158.00.
Near-Term Levels Stay in View
On the four-hour chart, the article identified minor support around 161.50. It said price has been rejected from that area several times in recent days. If the pair pulls back again, buyers may step in near 161.50, while sellers would look for a break to extend the move toward 160.50.
The article also said there was little more to add from the one-hour chart. It noted that buyers still have a better risk-to-reward setup around key support levels. For Monday, traders are also watching comments from Fed’s Waller on the economic outlook. Later in the week, the calendar includes the US PPI report, the BoC rate decision, US retail sales, jobless claims, and the University of Michigan consumer sentiment survey.
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