Key events today:

12:30 UTC: USD – Change in Durable Goods Orders.

The Japanese yen (JPY) continued to weaken on Friday following the release of weaker consumer price index (CPI) data published by the Statistics Bureau of Japan. The annual inflation rate dropped to 2.5% in April from 2.7% the previous month, marking the second consecutive month of slowing growth, but still remains above the Bank of Japan’s (BoJ) target level of 2%. Persistent inflation continues to pressure the central bank, prompting it to consider further tightening of policy.

The Bank of Japan emphasizes that for policy normalization, a favorable cycle of sustainable and stable achievement of the 2% price target along with strong wage growth is necessary. Meanwhile, investors anticipate that the continued weakening of the Japanese yen may force the Bank of Japan to delay the next interest rate hike to mitigate the impact on the cost of living, according to Reuters.

The US dollar (USD) is rising amid hawkish sentiments related to the Federal Reserve maintaining higher rates for an extended period. These sentiments are bolstered by higher-than-expected US Purchasing Managers’ Index (PMI) data published on Thursday.

Recommendations: Predominantly trade with Buy orders from the current price level.