BUZZ-COMMENT-Hot US CPI may prompt Japan to intervene in USD/JPY
Reuters · 11/13 10:20
BUZZ-COMMENT-Hot US CPI may prompt Japan to intervene in USD/JPY

- The chances of Japan intervening in the foreign exchange market for the first time since October 2022 will increase if Tuesday's U.S. inflation data is hotter than expected and propels USD/JPY beyond 152.

USD/JPY has traded above 152 since 1990. Japan intervened in FX markets (buying yen) when USD/JPY rose to threaten 152 in October last year.

Japanese Finance Minister Shunichi Suzuki said Japan would keep monitoring the currency market and respond appropriately, after USD/JPY rose to a 13-month EBS high of 151.86 on Monday, and that "excessive moves are undesirable".

Hotter-than-expected US inflation data on Tuesday would be a blow for dollar bears and doves hoping that the Federal Reserve starts cutting interest rates in the second quarter of 2024. October CPI is forecast up 0.1% MM and 3.3% YY, with core CPI forecast up 0.3% MM and 4.1% YY. The US data is due out at 1330 GMT.

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(Robert Howard is a Reuters market analyst. The views expressed are his own)

((robert.howard@thomsonreuters.com))