This Week: JPY headed to intervention?

• The USDJPY's 160 level triggered the BoJ's $60 billion intervention in late April.

• Traders focus on Friday’s US & Japan inflation data

• Bloomberg model: 76% chance of 157.22-161.87 trading range in next 7D

This popular FX pair is moving back towards 160 – a price area which triggered the largest-ever intervention by the Japanese government on its currency.

That end-April episode triggered not just USDJPY’s biggest one-day price swing since 2022, but also ultimately sent it lower by over 8,000 pips!
 

Traders will be keeping an eye on the intervention risks, with another on the inflation data due out of the US and Japan on Friday, June 28th.

With all that in mind, Bloomberg’s model currently forecasts a ~76% chance of a 157.22 – 161.87 trading range for USDJPY, as we close out the first half of 2024.
 

Events Watchlist:
 

• Friday, June 28: Tokyo June consumer price index (CPI)

Economists predict that Tokyo’s CPI, which are seen as frontrunners to the national CPI released later, inched higher overall in June.

Stronger inflationary pressures are set to allow for another Bank of Japan (BoJ) rate hike this year.

Such expectations in turn may lead to a lower USDJPY (stronger Yen), away from intervention territory.

In the past 12 months, USDJPY moved as much as 0.4% up or 0.3% down in the 6 hours after this data release.

• Friday, June 28: US May PCE Deflators

Economists predict that the US PCE Deflators, which are the Fed’s preferred inflation measure, eased lower in May, with the month-on-month numbers showing little to no growth.

Higher-than-expected figures may deter the Fed from cutting interest rates, setting up a higher USDJPY (stronger USD), closer to intervention territory.

In the past 12 months, USDJPY moved as much as 1% up or 0.35% down in the 6 hours after this data release.

Here’s a comprehensive list of other key economic data and events due this week:
 

Monday, June 24

• NZD: New Zealand May trade balance
   
• JPY: BoJ Summary of Opinions
   
• SG20 index: Singapore May CPI
   
• TWN index: Taiwan May unemployment, industrial production
   
• GER40 index: Germany June IFO business climate
   
• US2000 index: Speech by San Francisco Fed President Mary Daly
   

Tuesday, June 25

• AU200 index: Australia June consumer confidence
   
• CAD: Canada CPI
   
• US500 index: US June consumer confidence; speeches by Fed Governors Lisa Cook and Michelle Bowman
   

Wednesday, June 26

• AUD: Australia May CPI
   
• GER40 index: Germany July consumer confidence
   

Thursday, June 27

• JP225 index: Japan May retail sales
   
• CNH: China May industrial profits
   
• TRY: Turkey rate decision
   
• SEK: Sweden rate decision
   
• EU50 index: Eurozone June economic confidence
   
• US30 index: US weekly initial jobless claims; 1Q GDP (final)
   
• Nike earnings
   
• Biden vs. Trump: US Presidential election debate
   

Friday, June 28

• JPY: Japan June Tokyo CPI; May jobless rate and industrial production
   
• EUR: Germany June unemployment; France June CPI
   
• GBP: UK 1Q GDP (final)
   
• USD index: US May PCE deflators, personal income and spending; June consumer sentiment (final)