No major events are expected today.

The Japanese yen (JPY) is recovering its recent positions against the US dollar (USD) following the release of Tokyo’s Consumer Price Index (CPI) data on Friday. The rise in Tokyo’s inflation strengthens the Bank of Japan’s (BoJ) hawkish stance on monetary policy, supporting the Japanese yen and exerting downward pressure on the USD/JPY pair.

The Consumer Price Index (CPI) in Tokyo rose to 2.6% year-on-year in August, compared to 2.2% in July. The core CPI also increased to 1.6% year-on-year in August, up from the previous 1.5%. Additionally, Japan’s unemployment rate unexpectedly rose to 2.7% in July, above the market estimate and the June figure of 2.5%, marking the highest level since August 2023.

The decline of the USD/JPY pair may be limited as the US dollar maintains its recent gains following stronger-than-expected economic data released on Thursday. However, “dovish” comments from the Federal Reserve may cap further strengthening of the dollar.

Investors are awaiting the July Personal Consumption Expenditures (PCE) index, which will be released later during the North American session, looking for clues about the future direction of US interest rates.

Recommendations: Trading primarily with Buy orders from the current price level.