Currency sentiment: JPY - Bearish, USD - Neutral
Reference time frame: Short-term
The recent release of the BoJ Core CPI (YoY) data for Japan shows a decrease from 2.6% to 2.3%, indicating a slight slowdown in inflation. This data suggests that the Bank of Japan may need to take further monetary easing measures to stimulate economic growth. As a result, the Japanese Yen (JPY) is likely to face pressure in the short-term, leading to a bearish sentiment.
On the other hand, the US Dollar (USD) remains neutral as various economic indicators show a mixed picture of the economy. While the unemployment rate remains low at 3.7% and GDP growth was strong at 3.2% in Q4, other data such as retail sales and durable goods orders have shown weakness. The Federal Reserve's interest rate decision of 5.50% also indicates a stable monetary policy stance.
In conclusion, the JPY is expected to be bearish in the short-term due to the lower than expected CPI data, while the USD remains neutral as the economy continues to show signs of both strength and weakness. Traders and investors should closely monitor further economic data releases and central bank decisions to gauge the future direction of these benchmark currencies.