The USD/JPY market will be in focus from 7 to 11 September, with the US August CPI and PPI and Japan’s revised April–June GDP providing key trading cues. Strong US data could drive dollar buying, while weak data could prompt dollar selling. In Japan, attention will focus on whether GDP and wage indicators strengthen expectations for additional BOJ rate hikes.
The USD/JPY market for the week of 7–11 September will focus on the US August CPI and PPI and Japan’s revised April–June GDP. If US inflation data exceeds market expectations, dollar buying may accelerate; if it falls short, expectations for a Fed rate hike may recede, potentially leading to increased dollar selling. In Japan, attention will also focus on whether GDP and wage indicators strengthen expectations for additional BOJ rate hikes.
The expected trading range is from the upper ¥153s to the lower ¥159s. Japan’s composite leading index is scheduled for release on 7 September, followed by the July Monthly Labour Survey and revised GDP on 8 September. The US MBA mortgage applications index is due on 9 September, followed by US PPI and initial jobless claims on 10 September. BOJ-related indicators and the US CPI and University of Michigan index are scheduled for release on 11 September.
US inflation data is highly likely to influence expectations for a Fed rate hike, and strong data could support a rebound in the dollar. If the CPI and PPI weaken, expectations for a rate hike may recede, potentially leading to dollar selling. In Japan, the market is expected to focus on whether GDP, wages and corporate prices will support an additional BOJ rate hike.
This week, developments at the Fed and the BOJ have been cited as key factors likely to determine the direction of USD/JPY. Depending on the US inflation data, both a scenario in which USD/JPY remains capped and one in which it rebounds are envisaged for next week.