Key events today:

12:30 UTC: USD – Retail Sales Change.

The USD/JPY pair remains steady after losses in the previous session, trading around 152.60 during Asian hours on Friday. The pair faced challenges following U.S. President Donald Trump’s decision to delay the implementation of reciprocal tariffs. Additionally, the U.S. dollar (USD) is weakening due to a decline in U.S. bond yields across the curve, despite ongoing concerns about a global trade war. Investors now await the release of U.S. retail sales data later in the day.

The U.S. Dollar Index (DXY), which measures the USD against six major currencies, continues to decline for the fourth consecutive session. DXY is trading around 107.00, while the yields on 2-year and 10-year U.S. Treasury bonds stand at 4.31% and 4.53%, respectively, at the time of writing.

Core PPI inflation in the U.S. rose to 3.6% YoY in January, exceeding the expected 3.3% but slightly below the revised 3.7% (previously reported as 3.5%). This has strengthened expectations that the Federal Reserve (Fed) will postpone rate cuts until the second half of the year. Moreover, persistently high inflation may further support the forecast that the Fed will keep interest rates at 4.25%-4.50% for an extended period.

On Friday, Japan’s Economy Minister Ryosei Akazawa stated that the country’s authorities would respond appropriately to the U.S. reciprocal tariffs. Akazawa also noted that a weak Japanese yen (JPY) has a mixed impact on Japan’s real economy.

The Japanese yen (JPY) found support after stronger-than-expected Producer Price Index (PPI) data from Japan on Thursday, which bolstered expectations of further rate hikes by the Bank of Japan (BoJ). The data indicates increasing inflationary pressure in Japan, reinforced by recent wage growth figures, strengthening the case for additional BoJ rate hikes.

Recommendations: USDJPY: SELL 152.50, SL 153.15, TP 151.80.