Key Moments
- USD/JPY trades near 159.10 in a tight range. Price has moved between 158.65 and 159.35 over the past three sessions.
- Iran says it has completed a final draft of a peace proposal with the US. However, it still insists on keeping uranium stockpiles and control of the Strait of Hormuz.
- Japan’s National CPI ex Fresh Food rose 1.4% YoY in April. This came below the 1.7% forecast and down from 1.8% previously.
US Dollar Edges Higher as USD/JPY Consolidates
USD/JPY trades modestly higher near 159.10 during the European session on Friday. However, the pair still moves sideways after three sessions of range trading. Market participants continue to watch US-Iran negotiations closely.
Meanwhile, the US Dollar Index (DXY) rises 0.1% and holds near 99.30. As a result, the Greenback offers mild support to USD/JPY.
US-Iran Peace Proposal in Focus
Iran’s Labour News Agency (ILNA) reports that Tehran has completed a final draft of a peace proposal with the US. However, Iran still holds firm on two key issues. It wants to keep its uranium stockpiles. It also demands control over the Strait of Hormuz.
These developments shape risk sentiment. Therefore, traders remain cautious. They avoid pushing USD/JPY out of its recent range.
Fed Rate Expectations and US Inflation Backdrop
Markets still expect the Federal Reserve to keep rates unchanged this year. In addition, higher energy prices continue to support inflation pressures in the US.
US CPI rose 3.8% YoY in April. This marks the highest level in nearly three years. As a result, expectations for prolonged tight policy remain in place.
Japan CPI Undershoots Expectations
Japan’s CPI ex Fresh Food rose 1.4% YoY in April. However, the figure missed the 1.7% forecast. It also fell from 1.8% in the previous reading.
This weaker print signals softer inflation momentum. Consequently, it may reduce pressure on the Bank of Japan to tighten policy quickly.
| Japan National CPI ex Fresh Food (YoY) – April | |
|---|---|
| Actual | 1.4% |
| Consensus | 1.7% |
| Previous | 1.8% |
| Release time | Thu May 21, 2026 23:30 |
| Frequency | Monthly |
| Source | Statistics Bureau of Japan |
USD/JPY Technical Picture
USD/JPY remains stuck in a tight range between 158.65 and 159.35. This range has held for three consecutive sessions. However, the short-term bias stays constructive while price holds above the 20-day EMA at 158.44.
The 14-day RSI sits near 56. This reading signals moderate bullish momentum. It also shows that the pair is not yet overbought.
On the downside, the 20-day EMA at 158.44 acts as the first support. If sellers break this level, USD/JPY may slide toward 157.31. On the upside, resistance stands at 160.73. A breakout above the range would be needed to test that level.
About Japan’s National CPI ex Fresh Food
Japan’s CPI ex Fresh Food is published monthly by the Statistics Bureau of Japan. It tracks price changes across a wide basket of goods and services. However, it excludes fresh food because prices often swing due to weather.
The YoY reading compares prices with the same month last year. Generally, higher inflation supports the Japanese Yen. In contrast, weaker inflation often weighs on the currency.
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