USD/JPY extends upside to 155.00 amid caution ahead of US data, BoJ policy

• USD/JPY moves higher to 155.00 as US Dollar bounces back.
• Investors await the US Data to get cues about when the Fed will pivot to interest rate cuts.
• The BoJ is projected to raise interest rates only one more time by year-end.

The USD/JPY pair advances to historic highs of 155.00 in Wednesday's London session. The asset strengthens as the US Dollar finds support amid uncertainty ahead of the United States Q1 Gross Domestic Product (GDP) and the core Personal Consumption Expenditure Price Index (PCE) data for March, which will be published on Thursday and Friday.

The economic data will significantly influence market expectations about when the Fed will start reducing interest rates.

The market sentiment is asset-specific as S&P 500 futures have added some gains in the European session, while risk-perceived currencies drop against the US Dollar.  The US Dollar Index (DXY) adds some gains after discovering buying interest near 105.70.

On Tuesday, the US Dollar corrected sharply after the S&P Global reported a weak US preliminary PMI report for April. The agency reported that the Manufacturing PMI remains below the 50.0 threshold that indicates a contraction and the Services PMI falls sharply. This has suggested that strong US economic outlook is losing some heat.

In today's session, investors will keenly watch the Durable Goods Orders for March. Orders for Durable Goods rose by 1.4% in February. Durable Goods Orders include those products that have life span of three years or more. Strong Durable Goods Orders indicate a stubborn inflation outlook.

Meanwhile, the Japanese Yen weakens as investors expect that the Bank of Japan (BoJ) will not continue raising interest rates this week. Last time, the BoJ pushed interest rates to 0%-0.1% after maintaining a super easy monetary policy for 17 years. A Reuters poll showed that the BoJ will tighten policy further once this year and is expected to keep it stable till the June meeting.

Fears of Japan's intervention in the FX domain to support the sliding Japanese Yen deepen.  In the early European session Senior Japan Ruling Party Executive Ochi said, "There is no broad consensus right now, but if the yen slides further toward 160 or 170 to the dollar, that may be deemed excessive and could prompt policymakers to consider some action" Reuters reported.