The morning USD/JPY outlook points to the mid-¥160s as the next target after the pair achieved a 50% retracement, following movement around the previous close and the US CPI results. Created on 13 August 2026 at 7:30 a.m.
USD/JPY ended yesterday's trading broadly around the ¥159 level, while the US July CPI came in line with market expectations. This has reinforced expectations that the Federal Reserve will forgo a rate hike in September, while there is also a view that expectations for a September rate hike by the Bank of Japan are strengthening. However, expectations of a narrowing US-Japan interest-rate differential have not fundamentally changed the yen's broader trajectory. Demand for the dollar remains firm, and some expect the yen's weakening trend to continue regardless of whether intervention occurs.
The 50% retracement is said to have been achieved at around ¥159.48, with the mid-¥160s, corresponding to a 61.8% retracement, anticipated as the next retracement target. Reports suggest that USD/JPY could test the key ¥160 level again today.