Japan's March trade surplus hit ¥667B as exports rose 11.7% YoY, though imports came in hot at 10.9% on energy costs.
Elevated crude tied to the Strait of Hormuz closure continued to pressure Yen amid Japan's reliance on imported energy.
Thursday's Japan CPI and US PMI data will test Yen direction, with Friday's UoM inflation expectations also in focus.
USD/JPY was little changed on Wednesday, hovering close to 159.50 in a narrow session after Tuesday's push to 159.64. Price has been confined between 159.10 and 159.60 through the midweek stretch, with overlapping small-bodied candles pointing to indecision.
Japan's March trade data released late Tuesday showed a ¥667 billion surplus, coming in well below the ¥1,106 billion consensus as imports ran hot at 10.9% YoY versus a 7.1% forecast. Exports climbed 11.7% YoY, outpacing expectations, but the Strait of Hormuz closure has kept crude oil prices high, inflating Japan's energy import bill and weighing on Yen. Market hopes for a resolution to the US-Iran conflict have softened as goalposts continue to shift, though any genuine de-escalation would likely spark a risk-on rotation and broad US Dollar weakness.
On the US side, Thursday brings Initial Jobless Claims (consensus 212K, prior 207K) alongside preliminary April S&P Global Purchasing Managers Index (PMI) figures, with Services forecast to return to the 50 threshold after a brief dip into contraction and Manufacturing seen near 52.5. Japan's National Consumer Price Index (CPI) also lands Thursday, with the core measure excluding fresh food expected at 1.8% YoY versus 1.6% prior, a hotter print likely to fuel renewed BoJ hike speculation. Friday's University of Michigan (UoM) sentiment and inflation expectations round out the week, with one-year inflation expectations forecast steady at 4.8% amid the supply-shock impulse from elevated crude.#USD/JPY #USD #write2earn