The USDJPY pair is currently consolidating at the 148.60 level. Market sentiment remains risk-averse, influenced by recent weak US economic data, including the Flash Services PMI and Consumer Confidence reports.

Inflation expectations have risen in the US, raising concerns that the Federal Reserve may not reduce rates swiftly if economic slowdown occurs. Upcoming NFP and CPI reports may further impact market perceptions ahead of the March FOMC meeting.

On the daily timeframe, buyers target a rally towards 160.00, while sellers look for a decline toward 140.00. The 4-hour chart indicates range-bound activity, with both buyers and sellers poised for potential price movements.

Today’s US Jobless Claims figures and tomorrow’s Tokyo CPI could act as market catalysts, with traders watching for changes in risk sentiment.

A cautious mood has settled in, with traders assessing upcoming economic data for further direction. The rise in inflation expectations is shaping near-term speculation, particularly regarding how the central bank may respond. Given that policymakers remain data-dependent, the forthcoming Non-Farm Payrolls and CPI readings will be watched closely. If the labour market remains firm while inflation data stays elevated, rate cuts could be delayed, keeping US yields supported. Alternatively, any softness in employment or consumer prices may tilt expectations towards earlier easing.

Technical indicators suggest price remains confined within a defined range, with neither side gaining clear control. Short-term momentum signals indicate a neutral stance, as traders react to incoming data while waiting for a broader trend to take hold. The longer the pair remains in consolidation, the stronger the eventual breakout could be once conviction builds. In the meantime, interest rate expectations will remain a primary driver of sentiment.

Looking ahead, today’s jobless claims report provides another layer of insight into labour market conditions. If filings decline, it would reinforce the case for policy stability, while an uptick could stir speculation around a potential slowdown. Meanwhile, tomorrow’s inflation data from Tokyo may influence expectations on monetary policy adjustments, given the role consumer prices play in shaping central bank outlooks. Market participants will be particularly sensitive to any unexpected readings, as these could amplify volatility and push price action beyond its current boundaries.

With both economic and technical factors in play, traders should remain attentive to data surprises and shifts in sentiment. Sudden movements remain a possibility as markets react to incoming reports, and positioning may adjust swiftly based on how expectations evolve.