- USD/JPY flat lines around 157.85 in Thursday’s early Asian session.
- US inflation came in hotter than expected, with the PPI rising by 6.0% YoY in April.
- Trump will hold a high-stakes meeting with Xi Jinping in China.
The USD/JPY pair trades on a flat note near 157.85 during the early Asian session on Thursday. The major pair steadies as traders prefer to wait on the sidelines ahead of the US President Donald Trump-Chinese President Xi Jinping summit in Beijing and the release of the US April Retail Sales data later on Thursday.
The latest US inflation data came in hotter than expected, fueling expectations that the US Federal Reserve (Fed) will maintain elevated long-term interest rates. This, in turn, could underpin the US Dollar (USD) against the Japanese Yen (JPY).
The US Producer Price Index (PPI) jumped 6.0% YoY in April, following the 4.3% seen in March, according to the US Bureau of Labor Statistics on Wednesday. On a monthly basis, the PPI inflation rose to 1.4% in April from 0.7% in March and much higher than the estimate of 0.5%.
Bloomberg reported on Wednesday that Trump arrived in Beijing for a state visit to China, where he will meet with Xi Jinping to discuss topics including trade and the Iran war. This is the first state visit to China by a US leader in nine years.
Nonetheless, the potential upside for the pair might be limited amid fears of further currency intervention from Japanese authorities. Japan’s Finance Minister Satsuki Katayama said last week that “regarding recent currency moves, we confirmed that Japan and the US have been coordinating very well and have maintained close communication.”
