USD/JPY remains bid, approaches 150.00 ahead of US PCE inflation data

• The US Dollar approaches the 150.00, on track for a 1.3% weekly rally.
• Strong US data prompted traders to cut back Fed easing bets and have boosted the USD.
• Later today, the US PCE Price Index is expected to show that inflation increased moderately in August.
  

The US Dollar is heading higher for the third day in a row on Friday against a softer Japanese Yen. The pair remains bid, with bulls aiming for the 150.00 level, on track for a 1.3% weekly gain with investors awaiting the US PCE Price Index release for further insight into the Fed's near-term rate path.

An upward revision of US Q2 Gross Domestic Product, coupled with an unexpected decline in weekly jobless claims, calmed fears about a sharp economic slowdown and dampened hopes of a steep Fed monetary easing cycle.

Soft Tokyo CPI has hit the Yen

The Japanese Yen, on the other hand, has been hit by the moderate inflation trends shown by the advanced Tokyo CPI. Headline inflation eased to a 2.5% year-on-year rate in September, from August's 2.6% reading, while the core inflation grew at a steady 2.5% rate, against expectations of an acceleration to 2.6%.

These figures give further leeway for the Bank of Japan to maintain its wait-and-see approach and cast doubt about the possibility of a rate hike in late October.

The highlight today is August's US PCE Prices Index, which is expected to show an uptick to a 2.7% yearly rate from 2.6% in July, while the core rate is seen steady at 2.9%. Any figure below the 3% line is expected to keep hopes of further Fed rate cuts alive and might bring some risk appetite back to the market.