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The pair has printed a fresh monthly high at 146.60 in the European session. The major has witnessed a significant buying interest as investors are reconsidering bets supporting for a rate cut decision by the Federal Reserve (Fed) in March.The United States economic data, released for December, has indicated that the last leg of consumer price inflation is still stubborn, and labor demand is steady, however, business owners are reducing prices of goods and services at factory gates. This indicates that fears of inflation remaining persistent are still high.As per the CME Fedwatch tool, traders see a 66% chance for the Fed reducing interest by 25 basis points (bps) in March against 70% from Monday’s trading session. The commentary from pushed back market expectations of early rate cuts as he warned about a languishing return of inflation towards the 2% target.S&P500 futures have posted significant losses in the European session, indicating a sharp decline in the risk appetite of the market participants. The Index (DXY) has printed a fresh weekly high above 103.00 amid a cautious market mood. 10-year US Treasury yields have climbed above 4.0%.On the Tokyo front, upbeat (PPI) data for December failed to uplift the Japanese Yen. Monthly growth in the PPI was steady at 0.3% while investors anticipated a stagnant performance. The annual PPI data remained stagnant against 0.3% growth in November. Investors projected a de-growth in annual prices of goods and services at factory gates by 0.3%.
USD/JPY
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