USD/JPY dips lower as PPI jumps

The Japanese yen has started the week with losses. In the North American session, USD/JPY is trading at 137.44, down 0.64%.

Japan’s PPI almost unchanged at 9.3%

Japanese wholesale inflation climbed 9.3% y/y in November, a drop lower than the 9.4% gain in October. This was above the consensus of 8.9%, as a peak in inflation remains elusive. The continuing increase in raw material costs has forced companies to pass on these costs. Higher commodity prices and a weak yen have raised the costs of imports, which has boosted wholesale and consumer inflation. If this upward trend continues, it could damage Japan’s fragile economy, but the Bank of Japan has insisted that inflation is transitory and has been unwilling to change its ultra-accommodative policy.

Is this the calm before the storm? USD/JPY has been subdued for almost a week, but I would not be surprised to see stronger movement in the next day or two, with a host of key events on the economic calendar. On Tuesday, Japan releases the BoJ Tankan report, which is expected to show a slowdown in manufacturing, but stronger non-manufacturing activity due to the easing in Covid restrictions. The US releases the November CPI report, and we have seen how softer-than-expected CPI data sent risk appetite flying and the US dollar tumbling lower. The consensus for CPI is 7.3%, following a 7.7% gain in October.

The inflation report will be followed by the Federal Reserve rate announcement on Wednesday. The Fed is expected to deliver a 50-basis point hike, which is an oversize rate increase. Still, coming after four straight hikes of 75 bp, the Fed has found it difficult to dampen investor speculation that the Fed may soon wind up the current tightening cycle. The Fed recently paraded a stream of FOMC members to deliver hawkish messages, but the markets seem intent on seizing any data that supports the equity markets, and another soft inflation report could achieve that result and send the dollar downwards.


USD/JPY Technical

  • USD/JPY tested resistance at 137.13 earlier. Above, there is resistance at 138.25
  • There is support at 136.37 and 135.07

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.