Jakarta, GIC Trade – The Japanese yen appreciated moving below the 134 per dollar level as data showed that headline inflation in the U.S. unexpectedly slowed last month, supporting expectations that the Federal Reserve will pause interest rate hikes in June. 

Meanwhile, issues around the US debt ceiling and US recession fears also boosted safe-haven demand for the yen. Domestically, a summary of opinions at the Bank of Japan's April meeting showed that members debated the country's progress in achieving the inflation target, citing a positive cycle of wage and price increases.
 
Some members also flagged the side effects of the BOJ's current yield control and the possible impact if it raises interest rates in the future, a sign the central bank is considering future policy changes. 
 
The BOJ currently maintains its ultra-loose monetary policy and made no adjustments to yield curve control at its April meeting, but the bank removed forward guidance promising to keep interest rates at current or low levels.
 
While the dollar index held below 101.5 on Thursday after losing strength in the previous session as the latest CPI report showed that headline inflation in the US unexpectedly slowed last month.
 
The annual inflation rate reached 4.9% in April, defying expectations as there was no change and falling below 5% for the first time in two years.
 
Fundamentally, the latest CPI report or consumer price index showed that headline inflation in the US unexpectedly slowed last month to 4.9% from 5% giving expectations that the Federal Reserve will pause interest rate hikes in June. However, the BOJ's stance of maintaining its ultra-loose monetary policy, limited gains for the Japanese yen. Then how technically, see the following analysis:
 
Technical Analysis

 
The USD/JPY pair on the 1-hour period is trying to move up, needing to break through the resistance level at 134.4000 and head to the next resistance level at 134.780. The upward trend can also be seen from the FXBot template, where the JPY figure is lower by 6.1 than the USD figure of 7.2.  While the bullish bias is also supported by the Buy signal indicated by the green arrow.

This Forex and commodity trading analysis is a fundamental and technical view used by the author, not a suggestion or a solicitation. To get more information click on the image below.