Yen slides ahead of key US inflation data

The Japanese yen hovered around 161.6 per dollar on Tuesday, staying near its weakest level since 1986 as the wide interest-rate differential between the US and Japan continued to support the dollar. Despite repeated warnings from Finance Minister Satsuki Katayama that authorities stand ready to respond to excessive currency moves, the yen remained under pressure. Investors largely viewed the Bank of Japan?s recent rate hike as insufficient to significantly narrow the policy gap with other major economies. Additional weakness came from a stronger US dollar following hawkish signals from the Federal Reserve. Markets are now focused on upcoming US PMI and PCE inflation data, which could shape expectations for future Fed policy and drive the next move in USD/JPY.

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