USD/JPY awaiting the FED!The USD/JPY exchange rate as of December 12, 2024, reflects an increase of approximately 0.4%, reaching 152.50, driven by November's U.S. inflation data and expectations surrounding Federal Reserve monetary policy. The published data shows a 0.3% monthly rise in headline CPI, slightly above the 0.2% consensus, while core CPI remained stable at 0.3%. On an annual basis, headline inflation rose to 2.7% from 2.6%, and core CPI was steady at 3.3%, in line with projections. These results reinforce expectations for an interest rate cut by the Fed at the upcoming FOMC meeting, with an estimated 84% probability of a 25-basis-point reduction. Markets interpret the data as a sign that inflation is under control, potentially allowing the Fed to adopt a more accommodative policy to support economic growth. The 10-year Treasury yield, stable at 4.226%, indicates relative calm in bond markets, which may help limit volatility in the U.S. dollar. USD/JPY continues to benefit from the yield differential between U.S. and Japanese assets, supporting dollar strength. However, upcoming economic data, such as the PPI and initial jobless claims, will be crucial in confirming or adjusting market expectations. The 152.50 level represents a critical zone: a break above 152.80 could signal further bullish momentum toward 2024 highs, while a pullback might bring the pair to key support at 151.50. The current scenario suggests a consolidative phase, but incoming data and the Fed's decision will be pivotal in shaping future direction.
