FxWirePro: USD/JPY extends previous session's stellar gains, risk aversion and upbeat inflation data fueling upside

USD/JPY chart - Trading View 

USD/JPY was trading 0.07% higher on the day at 109.67 at around 05:00 GMT, extending the previous session's stellar performance.

Higher than expected US inflation data, which posted the biggest monthly increase in thirteen years boosted the U.S. dollar across the board.

The US Bureau of Labor Statistics' monthly report revealed on Wednesday that annual inflation, as measured by the Consumer Price Index (CPI), rose to 4.2% in April from 1.6%, beating estimates of 2.6% by a wide margin.

The US budget deficit came at record levels at USD 1.9 trillion for the first time in seven months of this budget year majorly on government spending and the stimulus package. 

On the other side, Japan Current Account records a surplus of ¥2650.10 B in March. The value of loans increased 4.80% on April YoY basis. Japanese Trade balance BOP Basis came at ¥983 B as compared to market estimate of ¥787 B.

Meanwhile, Bank of Japan Governor Haruhiko Kuroda earlier on Thursday warned of lingering uncertainty over the country's economic outlook weighing on the yen.

Also, escalating Middle-East tension keeps demand for the safe-haven dollar. Focus for now remains on the release of the US Producer Price Index (PPI), and Initial Jobless Claims for further impetus.

Price action has edged above daily cloud and technical indicators have turned bullish on the intraday charts.

Pair is on track to retest yearly highs at 110.96. Bullish invalidation only below daily cloud.