The Japanese Yen (JPY) trims a part of its intraday gains against the broadly stronger US Dollar (USD), assisting the USD/JPY pair to recover nearly 50 pips from the Asian session low, around the 149.00 neighborhood. Any meaningful JPY depreciation, however, seems elusive in the wake of the growing market acceptance that the Bank of Japan (BoJ) will hike interest rates further this year. The bets were reaffirmed by BoJ Deputy Governor Shinichi Uchida's remarks, saying that the underlying inflation rate is gradually rising toward the 2% target.

This helps offset the softer-than-expected Tokyo Consumer Price Index (CPI) print and should continue to act as a tailwind for the JPY. Apart from this, the risk-off impulse could further offer support to the safe-haven JPY. Meanwhile, the anti-risk flow triggers a fresh leg down in the US Treasury bond yields, resulting in the narrowing of the US-Japan rate differential. This should further contribute to limiting the downside for the lower-yielding JPY. The USD bulls might also opt to wait for the US Personal Consumption Expenditure (PCE) Price Index.

Source: Fxstreet