USD/JPY trades broadly calm near 145.00 ahead of US inflation data for May

• USD/JPY is broadly stable around 145.00 ahead of the release of the US inflation data for May.
• The US inflation is expected to have accelerated in May.
• Investors expect the BoJ to hold interest rates at 0.5% by the year-end.

The USD/JPY pair trades calmly around 145.00 during European trading hours on Wednesday. The pair oscillates in a tight range, with investors awaiting the United States (US) Consumer Price Index (CPI) data for May, which will be published at 12:30 GMT.

Ahead of the US inflation data, the US Dollar Index (DXY) wobbles around 99.00.

Investors will pay close attention to the US inflation data as it will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook. As measured by the CPI, the headline inflation is estimated to have grown at a faster pace of 2.5% on year, compared to 2.3% in April. Year-on-year core CPI is also expected to have accelerated to 2.9% from the prior reading of 2.8%.

The inflation will indicate whether new economic policies announced by US President Donald Trump are prompting price pressures, assuming that the impact of higher tariffs imposed by Washington will be borne by domestic importers who will pass on the effect to households.

Meanwhile, trade tensions between the US and China appears to have de-escalated after a two-day meeting in London. US Secretary of Commerce Howard Lutnick has expressed confidence after the meeting that China would reverse export restrictions on “rare earths”.

On the Tokyo front, investors doubt whether the Bank of Japan (BoJ) will raise interest rates again this year. A Reuters poll in the June 2-10 period showed that a slight majority of economists expect the BoJ to keep interest rates steady at 0.5% by the year-end and will raise them in early 2026.