- The Japanese Yen (JPY) is falling for a second day
- Oil rises despite the IEA launching a record reserve release
- The US Dollar (USD) rises after losses yesterday
- US CPI remained unchanged at 2.4%
The US dollar Japanese yen (USD/JPY) exchange rate is rising for a second straight day. The pair rose 0.24% in the previous session, settling on Monday at 158.05. On Wednesday at 21:00 UTC, USD/JPY trades 0.56% at 158.93 and trades in a range of 157.87 to 158.97.
The Japanese yen is depreciating on Wednesday amid ongoing uncertainty surrounding the Middle East conflict.
Higher oil prices are rising even as the International Energy Agency (IEA) announced the largest release of oil reserves in its history to help calm markets. The IEA said 400 million barrels will be released.
Japan remains highly vulnerable to oil shocks due to its reliance on energy imports, although the country appears ready to tap its emergency reserves to offset supply risks.
Separately, data showed that producer prices in Japan rose 2% in February, marking the softest increase in almost two years.
The U.S. dollar is rising across the board. The US dollar index, which measures the USD against a basket of currencies, is rising 0.44% on Wednesday to 99.26 after losses yesterday.
The US dollar is rising on Wednesday, recouping losses from the previous session and tracking Treasury yields higher.
Treasury yields are rising amid another near 5% rally in WTI crude oil prices, which supports a more hawkish Federal Reserve outlook and, in turn, the US dollar.
Yields are climbing despite US inflation coming in broadly in line with market expectations. US CPI rose 0.3% month-on-month and 2.4% year-on-year. Meanwhile, core inflation, which excludes more volatile items such as food and fuel, rose 0.2% month-on-month and 2.5% year-on-year, matching the five-year low recorded in the previous two readings.
Even so, CPI remains above the Federal Reserve’s 2% target and could worsen in the coming months amid the recent spike in oil prices.