USD/JPY refreshes two-day high at 150.80 as Japanese Yen weakens across the board

• USD/JPY climbs to near 150.80 amid sheer weakness in the Japanese Yen.
• Japan’s GDP rose faster by 1.2% in the third quarter of the year.
• Investors await the US CPI data for fresh interest rate guidance.

The USD/JPY pair posts a fresh two-day high at 150.80 in the North American session on Monday. The asset surges more than 0.5% as the Japanese yen (JPY) weakens across the board amid growing doubts among market participants about whether the Bank of Japan (BoJ) will raise interest rates in the monetary policy meeting on December 19.

Traders seem to be less confident about the BoJ pushing interest rates higher even though Japan’s Q3 Gross Domestic Product (GDP) grew faster than projected. Japanese Cabinet Office reported in the Asian session that the economy rose by 1.2% compared to the same quarter of the previous year against the estimates and the Q2 growth of 0.9%.

Going forward, investors will focus on the Producer Price Index (PPI) data for November for fresh cues on price pressures, which will be published on Wednesday. The producer inflation is estimated to have grown steadily on a monthly as well as an annual basis.

Meanwhile, the US Dollar (USD) consolidates in a tight range, with investors focusing on the United States (US) Consumer Price Index (CPI) data for November, which will be published on Wednesday. The inflation data will significantly influence market expectations for the Federal Reserve’s (Fed) likely interest rate action in the policy announcement on December 18.

There is an 87% chance that the Fed will reduce interest rates by 25 basis points (bps) to 4.25%-4.50% on December 18, according to the CME FedWatch tool.