Late in the New York session, USD/JPY was trading around ¥159.30, near the day's high, having recovered more than half of the decline following the intervention.
Late in the New York session, USD/JPY was trading around ¥159.30, near the day's high, as buying of the dollar gathered momentum. The pair moved back above its 200-day moving average, maintaining its post-intervention rebound trend.
The Bank of Japan released the main opinions from its Monetary Policy Meeting through 31 July today, with hawkish views expressed. Several members indicated concern about upside risks to prices and suggested that the pace of rate hikes could accelerate.
Market participants say the US-Japan interest-rate differential is supporting dollar buying and yen selling, and that the effects of the intervention are likely to be temporary. While ¥160 is being watched as the next upside target, some market views also suggest that caution over further intervention is increasing.
This week, the US Consumer Price Index (CPI) and Producer Price Index (PPI) will be closely watched as market drivers.