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USD/JPY swings after softer US inflation, but holds near 162

The yen’s intraday move tracked the June American PPI slowdown, while a wide interest-rate gap between the Fed at 3.75% and the BoJ at 1.00% continued to support yen-short pressure.

Reported · Written up by our desk · Major Pairs

USD/JPY rose to 162.42 in the London morning, fell to 161.90 in the New York afternoon, then rebounded to 162.28, leaving the pair around 162.11 at the time of writing, after opening near the same level. FXStreet described the session as volatile in form but not in direction, with the pair still largely contained within its established July range.

The day’s swings were linked to data and rate expectations. The June American Producer Price Index fell 0.3% month over month and slowed to 5.5% year over year, beating the consensus of 6.2% and briefly giving the yen room to move.

FXStreet said the Federal Reserve Chair’s Capitol Hill testimony around 14:00 GMT was scored neutral rather than hawkish, which helped limit follow-through. Later, a hawkish-scored Fed speech around 17:00 GMT prompted USD/JPY to reclaim the 162.00 level within about two hours, effectively reversing most of the earlier dip.

Despite the day’s back-and-forth, FXStreet pointed to the “bigger picture” remaining unchanged, anchored by the gap between US and Japanese policy rates. With the Fed at 3.75% and the Bank of Japan at 1.00%, the roughly 275-basis-point difference keeps paying yen shorts, while Japan’s Finance Ministry reportedly spent a record 11.7 trillion yen defending the currency between late April and late May and is suspected of additional, less transparent intervention in early July.

Latest closeUSD/JPY 162.11 ▼0.2%

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