USD JPY weekly outlook

Central bank decisions will dominate the calendar, but with both hikes largely expected, energy prices, US yields and lingering threat of intervention could prove just as important.

Intervention innuendo, confused Fed messaging and a hawkish BOJ repricing drove a violent move lower in USD/JPY last week. Strong payrolls stopped the slide, leaving this week’s inflation data to determine whether the rebound sticks.

USD/JPY remains perched above major trend support as intervention risk and Jackson Hole raise the stakes for the next directional move.

Treasury is fighting market forces just as Warsh wants them to do more of the work. The battle over who sets long-term borrowing costs could be the defining driver for USD/JPY this week.

USD/JPY barely responded to softer US data and falling Fed hike bets last week. With the calendar thinning, the price action may be the more important signal.

Speculative yen shorts are far less stretched, but the focus now shifts to US inflation. Another hot print could quickly revive Fed hike expectations and support USD/JPY.

Coordinated intervention has pushed fundamentals and technicals into the background for now. The next chapter will likely be written by Friday's payrolls report.

The yen remains on the back foot despite softer US inflation, while USD/JPY continues to compress beneath key resistance. Here's what matters this week and the levels that could determine the next major move.

USD/JPY is at a crossroads as traders shift focus to Japanese inflation, U.S. data, and Nvidia’s earnings. With bond yield dynamics evolving as central banks policies diverge, volatility could surge, making this a critical week for yen traders.