Investors are waiting for the release of First-quarter U.S. GDP data later today, and PCE price index data scheduled for tomorrow, Friday. These releases are anticipated to provide valuable insights about the Fed’s stance on interest rates. Recent indications of higher-than-expected U.S. inflation readings and hawkish Fed signals have led traders to adjust their expectations, largely pricing out the possibility of a June rate cut.

Meanwhile, the Japanese yen continued its decline, with the USDJPY pair hitting new 34-year highs ahead of the Bank of Japan (BOJ) meeting tomorrow. The central bank is widely expected to keep interest rates unchanged on Friday, following a historic rate hike in March.

However, recent weakness in the yen, coupled with expectations of higher wages and stickier inflation, put traders on guard over any hawkish signals from the BOJ.

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