USD/JPY lacked direction in the New York market even after the U.S. CPI release, trading in the mid-¥159 range. Concerns over intervention by Japanese authorities remain.
Late in the New York session, USD/JPY was bought back to around ¥159.50, reaching the day's highs, but failed to establish a clear direction even after the U.S. consumer price index (CPI) release. The market continued to focus on the ¥160 level.
The Bank of Japan's policy rate is 1.00%, compared with the Federal Reserve's rate of 3.50–3.75%, leaving a wide Japan-U.S. interest-rate differential. Coordinated Japan-U.S. intervention was carried out when USD/JPY approached around ¥164, but some market participants believe the effect of the intervention is gradually fading.
The yen has fallen by more than 1% since the start of August, and some of the ground recovered through the recent intervention is gradually being lost. Market participants said it was still too early to conclude that concerns over intervention had ended.
The situation described in the article is that, while USD/JPY is again approaching ¥160 at times, the authorities continue to signal their readiness to intervene, keeping attention focused on developments ahead.