Yen Dips as US CPI Data Complicates Fed's Path

Asian markets are bracing for the impact of a stronger US dollar and higher US Treasury yields, which may pose challenges for Asian bonds and currencies. However, overnight Asian equity futures suggest potential benefits from the ongoing rally in equities.
US CPI data highlights the persistent struggle to reach the 2% inflation target, complicating the Fed's path forward. Attention now turns to PPI data and its potential impact on a more favorable PCE number. US futures have opened slightly lower this morning.
The yen has weakened against the US dollar following the CPI data, with upcoming headline risks guiding the currency pair. The outcome of wage negotiations this week could influence the BOJ's March meeting decisions, with a potential policy-rate buffer in March before further hikes in July and October.