Buyers continue to remain in charge in USDJPY, as they pushed the price above 160, keeping it there. However, the risk of an intervention in forex by the Bank of Japan is very present. They intervened back in April just above 160, but now they’re holding on the sidelines, with the price surpassing April’s high.

The buying pressure on USD/JPY has been notably strong. After the intervention by Japanese authorities in late April, the pair dropped by approximately 8 cents. However, the 50-day Simple Moving Average (SMA) in yellow provided significant support in late May and early June, aiding a swift recovery in price.

USD/CHF Chart Daily – MAs Pushing the Lows Higher

This week, USD/JPY surged to 161, surpassing the previous intervention high of 160.20. It is important to note that while intervention can slow the pace of depreciation, it is not an effective tool for reversing the trend. Last night we had the Tokyo core CPI inflation which showed another increase in June, this time from 1.9% to 2.1%, beating expectations of 2.0%,however there was no reaction on the JPY.

Tokyo Core CPI Inflation and Employment for May

• Japan Tokyo Core CPI YY: Came in at 2.1% vs. an expected 2.0%. This figure is closely watched as a leading indicator for national core CPI, giving early insights into inflation trends.
• Jobs/Applications Ratio: Reported at 1.24 vs. an expected 1.26. Indicates a slight decrease in the ratio, reflecting potential tightening or stabilization in the job market.
• Unemployment Rate: Remained stable at 2.6%, matching expectations. Shows continued robustness in Japan’s labor market.

Japan’s Tokyo Core CPI year-on-year came in at 2.1%, slightly exceeding expectations of 2.0%. This figure is particularly significant as Tokyo’s CPI often foreshadows trends in the national core CPI, which will be released later. Given that Tokyo’s data is published well ahead of the national figures, today’s June data provides valuable insights into potential inflationary pressures for the broader economy.

Additionally, the jobs/applications ratio at 1.24 fell short of the expected 1.26, indicating a slightly weaker labor market than anticipated. Meanwhile, the unemployment rate remained unchanged at 2.6%, in line with expectations. These metrics collectively provide a snapshot of Japan’s economic health, influencing market sentiment and policy decisions moving forward.

USD/JPY Live Chart