USD/JPY edges higher to 155.30 on Wednesday, up 0.28% on the day. Japan's Labor Cash Earnings rose 2.1% YoY in April, compared to a 1.0% increase prior, higher than expected. The downbeat US Manufacturing PMI in May triggered the possibility of first rate cuts from the Fed in September. The interest rate differential between the Fed and BoJ continues to create a tailwind for the pair.
Himino added that the Japanese Yen’s weakness will be among the factors affecting the timing of its next interest rate hike. The weaker US Manufacturing PMI in May triggered the possibility of first rate cuts from the US Federal Reserve in September. Traders are now pricing in nearly 54.9% odds of a Fed rate cut in September, up from 49% at the end of last week, according to the CME FedWatch Tool. Investors will take more cues from the US ISM services PMI data, which is projected to rise to 50.