The yen strengthened over two sessions without reported intervention, taking USD/JPY to just under 156.00 after trading from just under 159.00 to just under 155.50, a 3.7-yen fall. The move cut through the 200-day EMA near 158.00 and left the pair within a few dozen pips of the 155.00 area linked to the joint July operation low, after peaking just above 160.00 on Wednesday in Asia. The earlier rebound from the intervention trough had been underpinned by a policy gap of more than two and a half percentage points, yet this week both sides shifted: Japan’s policy rate is 1% while the US target range is 3.50% to 3.75%, and markets now fully price a quarter-point BoJ rise at the 17–18 September meeting alongside talk of a quicker path than the previously assumed twice-yearly pace.
US Monetary Policy and Economic Data Outlook
In the US, a Fed governor flagged openness to holding rates at the 15–16 September meeting if inflation data co-operate, pulling September hike odds to around 50% from above 60%. Japan’s finance ministry says it spent a record ¥15.4 trillion (about $98bn) buying yen between 30 July and 26 August, but USD/JPY had retraced that by Wednesday morning. Attention turns to US non-farm payrolls at 12:30 GMT, with consensus at 56K after a 23K July decline, unemployment seen at 4.1%, and earnings at 0.3% m/m and 3% YoY; Japan follows with labour cash earnings at 23:30 GMT after 3.4% YoY, and Q2 GDP (second estimate) at 23:50 GMT, seen at 0.3% q/q and 1.1% annualised with a 2.6% deflator, plus the current account after a ¥92.3bn deficit. US PPI arrives on 10 September and CPI on 11 September, before the Fed on 16 September and the BoJ on 18 September, with a three-day Japanese holiday thereafter. Technical markers in view include resistance at 156.00, 157.00, the 200-day EMA near 158.00, 158.50, and the 50-day EMA just under 160.00, while support sits near 155.50, just above 155.00, then 154.00; the daily Stoch RSI is near 87.
