Credit Agricole CIB Research discusses USD/JPY outlook ahead of this week's US CPI print for the month of December.
"The 115.30/50 region is an important area of support for USD/JPY and risk sentiment as well as US CPI data later this week will determine if this level holds. On the risk sentiment front, Covid remains front and centre especially given that the omicron variant has reached Mainland China. Several meetings between Russia and the West in Europe this week could also impact sentiment," CACIB notes.
"The US CPI data on Wednesday will also be critical for USD/JPY. The Fed seems to be a bit more concerned about inflation than the labour market. Indeed, the Minutes to the December meeting suggest the FOMC is broadly content with the labour market at the moment, but is growing increasingly uneasy about inflation," CACIB adds.