USD/JPY pulls back from 160.00 as hot Japanese inflation data and intervention warnings bolster the yen, though hawkish Fed bets and US-Iran tensions keep the pair supported.
The pair is pulling back from the 160.00 mark after Japan's October CGPI accelerated to 7.1% yearly from 6.8%, lifting December BoJ rate-hike bets, and top currency diplomat Atsushi Mimura warned against excessive FX volatility, raising intervention risk. However, hawkish Fed bets including a possible 50-bps December hike and the unresolved US-Iran standoff support the dollar and dip-buying, leaving the pair rangebound around 159.00-160.00.
The USD/JPY pair retreated from the 160.00 psychological level during Thursday's Asian session as Japanese wholesale inflation accelerated to 7.1% in October. While intervention warnings from diplomat Atsushi Mimura provided support to the yen, the dollar remains resilient due to expectations of a potential 50-basis-point Federal Reserve rate hike in December and ongoing geopolitical tensions.
Hotter-than-expected Japanese wholesale inflation (7.1% yearly in October) strengthened the case for a BoJ rate hike in December, and Japan's top currency diplomat warned against excessive FX volatility, which raises intervention risk and lifted the yen.
The article notes dip-buying could re-emerge because Fed rate-hike bets (possibly 50 bps in December) and the US-Iran standoff support the dollar, but the 100-day SMA at 158.99 and intervention warnings cap the upside.