Wow, what a Tuesday!
- The initial reaction was to buy the US dollar, the secondary reaction was to buy the US dollar and the late-day reaction was to buy even more dollars.
--
USD/JPY topped out ahead of 145 last week:
And with the high CPI number from the US overnight, its back threatening the level again.
I posted these earlier, of relevance:
Solo Bank of Japan intervention seems unlikely:
And intervention could well backfire (be shrugged off by the market and prompt further USD/JPY buying) unless the BOJ changes policy. This high CPI number from the US might give the BOJ a reason to reconsider its 'transitory' view of inflation and prompt some change of course, even if just at the margin (rethinking the JGB yield cap is a likely first step, but just for clarity there has been no inkling of this from the BOJ at all as yet - but something to watch for).
The next BOJ meeting is September 21 (Wed.) & 22 (Thurs.)
