USD/JPY falls below 109.50 as US inflation misses the forecast

• The US core Consumer Price Index (CPI) rose 2.1% year-on-year in April coming out worse-than-expected. 
• The USD/JPY falls 30 pips after the CPI release. 

The USD/JPY is trading at around up 109.40 down 0.30% on Thursday as the US inflation for the month of April came below consensus.

Freshly released, the US Core Consumer Price Index year-on-year for April came worse-than-expected at 2.1% versus 2.2% forecast by analysts. Lower inflation reading is perceived as USD negative as the market can be worried that the Fed might slow down the rate hike cycle.

In an immediate reaction, the USD/JPY fell 30 pips and broke to the downside below the 109.50 level.

Earlier in the European session, the pair rose to the 110.00 handle to the retreat to the 109.60 region in the early American session just before the CPI release. 

USD/JPY technical levels:

The main trend is bullish and resistance are seen at the 110.00 handle and at the 110.50 swing high. Support is seen at 108.60 swing low and at 107.80 swing high.