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The USD/JPY currency pair witnessed moderate selling pressure during the Asian trading session on Thursday, breaking a three-day rally. Spot prices hovered above the 159.00 key psychological handle as foreign exchange markets digested geopolitical news regarding the Strait of Hormuz alongside broader macroeconomic trends. Traders are exercising caution ahead of critical economic updates. Market volatility remains contained as foreign exchange participants position themselves ahead of the Tokyo Consumer Price Index (CPI) release and Fed Chair Jerome Powell's speech at the Jackson Hole Economic Symposium. The Japanese Yen gained slight momentum due to safe-haven flows, while USD bulls displayed hesitation following recent sharp gains. Looking ahead, traders will closely watch whether USD/JPY can hold support around the 159.00 level. A hawkish stance from the Federal Reserve or higher-than-expected Tokyo inflation metrics could act as the next primary catalysts for directional breakouts in the major currency pair.
