Japanese Yen extends its steady intraday descent against USD; US PCE data in focus

• The Japanese Yen drifts lower in reaction to BoJ Governor Kazuo Ueda’s remarks this Friday.
• BoJ rate hike bets, geopolitical risk, and trade war fears could underpin the safe-haven JPY.
• Subdued USD price action might contribute to capping USD/JPY ahead of the US PCE data.

The Japanese Yen (JPY) attracts some intraday sellers and snaps a two-day winning streak against its American counterpart after Bank of Japan (BoJ) Governor Kazuo Ueda said this Friday that the underlying inflation is still somewhat below 2%. Apart from this, a modest bounce in the US Treasury bond yields and a generally positive risk tone undermines the safe-haven JPY. This, in turn, assists the USD/JPY pair in rebinding nearly 100 pips from the Asian session low. 

Meanwhile, data released earlier today showed that consumer prices in Tokyo – Japan’s capital – rose in January. This keeps hopes alive for further BoJ policy tightening and should limit any meaningful JPY depreciation. Furthermore, the uncertainty over US President Donald Trump’s policies holds back the US Dollar (USD) bulls from placing aggressive bets and might cap the USD/JPY pair ahead of the US Personal Consumption Expenditure (PCE) Price Index data.