• USD/JPY resumes the upside amid an upbeat outlook for the US Dollar.
• The Fed is expected to hold interest rates in the range of 5.25-5.50% at least for the first half of the current year.
• Investors await further guidance from Japan’s preliminary Q4 GDP and US Retail Sales data.

The USD/JPY pair resumes its upward journey after a mild correction to near 150.40 in the European session on Wednesday. The asset rebounds as dismal market sentiment has improved the appeal of the US Dollar.

There seems to have a mixed action in global markets as S&P500 futures have generated decent gains in the European session while risk-perceived currencies have been hit hard. However, US equities were heavily dumped on Tuesday after releasing the stubborn inflation report for January.

The US Dollar Index (DXY) has refreshed its three-month high near 105.00 as sticky price pressures indicate that the Federal Reserve (Fed) will hold interest rates in the range of 5.25-5.50% for somewhat longer than market participants had anticipated earlier.

As per the CME Fedwatch tool, traders see a 38% chance for a rate-cut decision of 25 basis points (bps), down from 50% after the release of the hotter-than-expected inflation report.

Going forward, the monthly US Retail Sales data will guide the US Dollar. According to the expectations, the Retail Sales were dropped by 0.1% in January after rising by 0.6% in December. A decline in Retail Sales could be the outcome of higher spending done by households in December due to the festive mood