USD/JPY slid to just above 159.50, down 2.31% and more than five yen from a peak just short of 164.00. The drop unfolded in minutes after 13:30 GMT, sliced through the 50-day Exponential Moving Average near 161.50, and then steadied within 20 pips of the 200-day EMA just below 158.00. One desk logged around $8.1bn of dollar selling across core venues in the next ten minutes, while broader volumes were far above normal, and there was no scheduled catalyst to match the scale. Earlier, US releases at 12:30 GMT showed second-quarter GDP growth of 1.5% versus a 2.1% consensus, while core PCE inflation printed 0.1% month-on-month; the yen also gained more than 2% against the euro and the pound and close to 2% versus the Australian dollar in the same window.
Bank Of Japan Decision And Economic Indicators
Focus now shifts to the Bank of Japan decision on Friday, with the policy rate expected to hold at 1.00% after June’s increase, and the fiscal 2026 growth forecast seen rising towards 0.8% from 0.5%. A large majority of economists still look for 1.25% by year-end, with October the preferred timing. Tokyo CPI for July arrived at 23:30 GMT: the ex-fresh food measure rose to 1.9% year-on-year versus 1.7% consensus and 1.6% prior, headline was 2.0% from 1.7%, and ex-food and energy also printed 2.0%, while June unemployment held at 2.5%. Japan spent roughly $70bn in April and May, yet the yen later returned to four-decade lows, with the US–Japan rate gap put at about 260 basis points; next week brings labour cash earnings after a 3.2% prior, US Nonfarm Payrolls after 57K, and a September Fed hike priced at 63%, alongside China PMIs seen at exactly 50.0.
