The US dollar came under pressure in the Wall Street following a release of the manufacturing index from the Philadelphia Federal Reserve Bank. The US currency was struggling for gains in the Asian trade today. The USD/JPY pair bounced from 110.00 and nearly approached the level of 110.20. The yen was unwilling to give up in light of upbeat inflation data from Japan. The Ministry of Internal Affairs and Communications reported that Japan's consumer price index climbed 0.7% in May, stronger than a 0.6% increase in April. The latest reading surpassed the market median forecast.
The core indicator excluding prices of fresh food also gained 0.7% in May in line with expectations. Another inflation index, which excludes prices of oil products and fresh food, rose 0.3%, down from a 0.4% growth in April. The subdued inflation is a reason why the Bank of Japan is widely expected to take some time before exiting its ultra-easy monetary policy. Indeed, the regulator still fails to spur inflation to the target level of 2%. Nevertheless, the negative key interest rate and the intention of the regulator to carry on with stimulus measure make no impact on trading sentiment on the yen. Meanwhile, traders are locking in profits on long positions on the US dollar.