FxWirePro: USD/JPY extends bounce off 200-DMA, rising expectations of higher interest rate peak by the Fed support dollar

Chart - Courtesy Trading View 

USD/JPY was trading 0.25% higher on the day at 137.11 at around 07:50 GMT.

The pair is extending bounce off 200-DMA support, gains for the second straight session.

Rising expectations for a higher interest rate peak by the Federal Reserve (Fed) keep the dollar buoyed.

Focus this week will be on the US five-year Consumer Inflation Expectations data, which will release on Friday.

On the other side, markets await the release of Japan's Gross Domestic Product (GDP) data on Friday. 

On an annualized basis, Japan’s GDP is expected to contract by 1.1% against 1.2% prior contraction. On a quarterly basis, data is expected to contract by 0.3%, similar to the prior print. 

A contraction in Japan’s GDP may compel the Bank of Japan to extend policy easing to support the economy.

Earlier in the day, BOJ’s Kuroda mentioned that Japan has not achieved stable 2% inflation accompanied by wage rises.

USD/JPY extends Friday’s rebound from the 200-DMA support. Price action hovers around 200H MA at 137.41. Watch out for decisive break above for upside continuation.