Dollar Fights Before Key Data Publication

The US dollar is struggling in the Asian session and is set to record a weekly loss ahead of the release of US inflation data. Such information could help investors evaluate the future policy of the Federal Reserve. Last month, the FOMC said it would consider a rate hike in December with possibly another three in 2018, however, there is little certainty that that plan materializes. On Thursday, economic data showed producer prices rose 0.4% last month on a year-on-year basis. Markets now need consumer data to strengthen their sentiment.

As reported at 10:52 a.m. (JST) in Tokyo, the USD / JPY pair was trading at 112.21 yen, down 0.05%; the pair reached a low of 112.14 yen, while the maximum for the session is 112,306 yen. The GBP / USD rose to 1.327, gaining 0.07% while the EUR / USD was at 1.1845, gaining 0.12%.

BOJ to Maintain Expansive Policy

While Fed policy is still uncertain and as investors await an aggressive policy change, the Bank of Japan reported that they intend to keep the current policy ultra flexible. BOJ Governor Haruhiko Kuroda said they were disappointed by wage growth and inflation, despite a moderately expanding Japanese economy. The BOJ's inflation target is 2%, well above the real 0.5% achieved.