• US Dollar tumbles after US inflation data but then trims losses. 
• USD/JPY falls to daily lows near 143.30 and climbs back to 143.80. 
• US annual rate rebounds to 3.2%, below the 3.3% of market consensus. 

The USD/JPY is currently hovering around the same level it was before the release of the US inflation and jobless claims data, around 143.80. Immediately after the reports, the pair tumbled to 143.27, but as time passed, it managed to recover all the lost ground.

Disinflation in the US, but still above target

The US Consumer Price Index (CPI) for July increased by 0.2%, which was in line with expectations. The annual rate rebounded from 3% to 3.2%, slightly below the market consensus of 3.3%. The Core CPI also rose by 0.2%, matching estimates, while the annual rate slowed from 4.8% to 4.7%.

In a separate report, the Labor Department informed that Initial Jobless Claims rose from 227,000 to 248,000, surpassing market estimates and reaching the highest level in five weeks.
Following these numbers, US yields experienced a sharp drop, and the US Dollar Index (DXY) fell to 101.77, reaching its lowest level since last Friday. However, the US Dollar recovered most of its CPI-driven losses, with the DXY rising back above 102.00.

No clear direction for USD/JPY

After the report, the pair reached a low point at 143.27, slightly above the 20-period Simple Moving Average on the 4-hour chart. The initial weakness after the data has turned into a potential reversal. 

The pair now faces immediate resistance at 143.90, and if it consolidates above that level, it could potentially reach the five-week high of 144.10 (Aug 10 high). On the other hand, if the pair falls below 143.50, the bearish momentum is likely to intensify.

Technical levels