FX.co ★ Japanese Yen Muted Ahead of US CPI

The Japanese yen remained steady at approximately 147.5 per dollar on Thursday, marking its third consecutive session of stability. Investors are keenly anticipating the release of U.S. consumer inflation data, which has the potential to reinforce expectations for more significant Federal Reserve rate cuts. In August, U.S. producer prices unexpectedly declined, mitigating concerns about persistent inflation and providing the Fed with greater flexibility to reduce borrowing costs. Meanwhile, in Japan, business sentiment showed improvement in the third quarter, driven by a notable rebound in exports. Japanese firms boosted shipments to the United States in anticipation of the newly imposed 15% blanket tariffs. Additionally, separate data indicated that producer prices in Japan increased by 2.7% year-on-year in August, accelerating from a revised 2.5% growth in July. Politically, market participants continued to assess the repercussions of Prime Minister Shigeru Ishiba's resignation. His departure followed deepening divisions within the ruling party and mounting pressure after last year's electoral defeat.