The Japanese yen rose in Asian trade on Wednesday against a basket of major rivals, recovering from two-week lows against the dollar and about to mark the first profit in three days following scorching Japanese producer prices data. 

The data shows increasing inflationary pressures on BOJ policymakers, which boosts the odds of a third interest rate hike next week.

The Price 

The USD/JPY fell 0.35% to 151.41, with a session-high at 151.95. 

The yen lost 0.5% against the dollar on Tuesday, hitting a two-week trough at 152.18 as US yields rebounded.

Japanese Price 

Earlier Tokyo data showed producer prices rose 3.7% y/y in November, the best since June 2023, and beating estimates of 3.4%, and up from 3.6% in October. 

Producer prices are highly predictive of consumer prices in November, and indicate the amalgamation of price pressures on BOJ policymakers. 

Japanese Rates 

Bank of Japan Governor Kazuo Ueda said last week that subsequent interest rate hikes will depend on data moving in the right direction.

A BOJ source told Reuters the rate decision at the December meeting will be made live with no prior preparations. 

Recent data showed Tokyo’s inflation accelerated last month, heaping inflationary pressure on the Bank of Japan’s policymakers. 

Following the data and remarks, the odds of a BOJ interest rate hike in December rose from 55% to 60%.

US Rates

According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut stood at 85% for December. 

Now investors await mainline US inflation data for November, which will shed light on inflationary pressures on the Federal Reserve’s policymakers. 

Gold prices rose on Tuesday even as the dollar gained ground against most major rivals ahead of important US inflation data. 

Later this week, US consumer prices data will be released for November, with many analysts expecting a 0.3% monthly rise, and a 2.7% yearly rise. 

According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut stood at 86% for December. 

Otherwise, the dollar index rose 0.2% as of 19:54 GMT to 106.4, with a session-high at 106.6, and a low at 106.04.

On trading, gold spot prices rose 1.2% as of 20:31 GMT to $2717.9 an ounce, the highest since November 22. 

The Australian dollar fell against a basket of major rivals following an expected decision by the Reserve Bank of Australia on monetary policies. 

The RBA decided to hold interest rates at 4.35% as expected by the markets.

On trading, AUD/USD fell 0.9% to 0.6381 as of 20:03 GMT. 

Loonie 

The Canadian dollar rose 0.1% against its US counterpart as of 20:03 GMT to 0.7059. 

صعد الدولار الكندي مقابل نظيره الأمريكي في تمام الساعة 20:03 بتوقيت جرينتش بنسبة 0.1% إلى 0.7059.

The Dollar 

The dollar index rose 0.2% as of 19:54 GMT to 106.4, with a session-high at 106.6, and a low at 106.04. 

According to the Fedwatch tool, the odds of a 0.25% Fed interest rate cut stood at 89% for December. 

Now investors await mainline US inflation data for November, which will shed light on inflationary pressures on the Federal Reserve’s policymakers. 

Global oil prices rose on Tuesday for another session away from two-week lows amid improving demand from low levels, and on the outlook of strong fuel consumption in China.

The gains came before initial data on US crude stocks from the American Petroleum Institute, expected to show a buildup for the second straight week. 

Price

US crude rose 0.7% to $68.57 a barrel, with a session-low at $67.74.

Brent added 0.5% to $72.23 a barrel, with a session-low at $71.56. 

On Monday, US crude rose 1.5%, while Brentt added 1.25%, the first profit in four days away from two-week lows. 

Chinese Demand 

Chinese authorities announced the adoption of a fiscal policy more focused on stimulating and qualitative easing to boost GDP growth, which could help improve fuel demand. 

US Stocks 

Later today, initial data on US crude stocks will be released from the American Petroleum Institute, expected to show a buildup for the second straight week.