Yen Falls As European Stocks Climb On Fed Rate Pause Hopes

(RTTNews) - The Japanese yen was lower against its most major counterparts in the European session on Thursday, as lower-than-anticipated U.S. inflation data strengthened the possibility of a pause in rate hikes by the Federal Reserve.

Overnight data showed that U.S. consumer inflation eased to 4.9 percent in April from 5.0 percent in March and versus economist forecasts for 5.0 percent.

Investors expect that moderation in inflation may offer scope for easier monetary policy to the Fed going forward.

Market participants await U.S. reports on producer price inflation and weekly jobless claims for more direction.

China's consumer prices rose at the slowest pace in more than two years in April, and factory gate deflation deepened, fueling debate over the need for additional stimulus to support a patchy post-COVID economic recovery in the country.

The yen advanced to 6-day highs of 169.03 against the pound and 150.30 against the franc, from its early lows of 169.65 and 151.07, respectively. The yen may find resistance around 163.00 against the pound and 144.00 against the franc.

The yen climbed to a 6-day high of 90.47 against the aussie and near a 2-week high of 146.80 against the euro, off its early lows of 91.15 and 147.59, respectively. The currency is seen finding resistance around 87.00 against the aussie and 142.5 against the euro.

The yen edged up to 85.18 against the kiwi and 100.14 against the loonie, up from its prior lows of 85.62 and 100.48, respectively. Next immediate resistance for the currency is seen around 84.00 against the kiwi and 98.00 against the loonie.

In contrast, the yen fell to 134.84 against the greenback, reversing from an early 6-day high of 133.89. The next possible support for the currency is seen around the 136.00 level.

Looking ahead, the monetary policy decision from the Bank of England is due at 7.00 am ET. The BoE is set to raise the benchmark interest rate by 25 basis points to 4.50 percent.

U.S. PPI for April and weekly jobless claims for the week ended May 6 are due in the New York session.