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USD/JPY tests 200-day support as Japan data firms, BoJ hike odds rise
Brown Brothers Harriman said Japan’s July CPI was below the BoJ’s 2026 core forecasts, even as markets priced an 82.0% chance of a September 25 bps hike.
USD/JPY is testing key support at its 200-day moving average around 158.34, with Brown Brothers Harriman highlighting the level as Japan data firmed, according to FXStreet.
The note pointed to August private sector growth reaching a six-month high, with the composite PMI improving to 53.4 from 52.7 in July.
FXStreet also cited July inflation details, saying headline CPI rose to 1.9% year on year, core CPI ex fresh food to 1.8%, and core CPI ex fresh food and energy to 1.9%. Those core measures were described as still tracking below the Bank of Japan’s 2026 core forecast of 2.5%.
On policy expectations, BBH said swaps markets priced an 82.0% chance of a 25 bps BoJ hike to 1.25% at the September 18 meeting, with 75 bps of tightening priced over the next twelve months. Even so, the firm noted USD/JPY could still drift lower if expectations shift toward a more dovish Fed stance.
Latest closeUSD/JPY 158.89 ▲0.9%