USD/JPY is almost unchanged on Friday. In the North American session, the pair is trading at 109.60, up 0.01% on the day. On the release front, Japanese National Core CPI improved to 0.9%, matching the forecast. The All Industries Activity indicator declined 0.4%, marking a fifth successive decline. In the U.S., the markets are braced for weak durables reports. Durable goods orders is expected to decline 2.0% in April, after a strong gain of 2.7% in March. The core reading is expected to slow to 0.1%, down from 0.4% in the previous release.

The Japanese yen thrives off high risk apprehension, and the currency took full advantage of investor jitters on Thursday. USD/JPY declined 0.70%, its worst daily performance since mid-March. Trade tensions between the U.S. and China have escalated, and hopes for a trade deal between the two super-economies have not materialized. China has reacted angrily to U.S. sanctions on Huawei and has suspended trade talks with the U.S. The spike in tensions has weighed on global stock markets, and nervous investors have flocked to safe-haven assets, such as the Japanese yen.

Patience, please! This has been the mantra in 2019 from the Federal Reserve. The minutes of the May policy meeting underscored that the Fed has no plans to change interest rates anytime soon. Although Fed members sounded more optimistic about economic growth, they remain committed to maintaining current rate levels, given that inflation remains low. Despite the Fed message, the markets expect at least one rate cut in 2019. The CME Group has priced in a 36% likelihood of a 25-point basis cut at the September meeting. The possibility of lower U.S. rates makes the greenback less attractive to investors, which could bode well for the yen.

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