Intervention effect fades as yen approaches 160, market focuses on U.S. inflation data

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智通财经2026/08/11 07:11

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During Tuesday's Asian trading session, the yen fluctuated around 159.20 against the US dollar, following a 0.9% decline on Monday, moving further away from last week's three-month high of 155.20. At the end of July, Japan and the US implemented a rare joint intervention when the yen hit a 40-year low of 163.99, which temporarily strengthened the currency. However, nearly half of those gains have since been surrendered, and traders generally believe another intervention is only a matter of time.
Speculators significantly reduced their net short positions in the yen from 8.865 billion USD to 3.604 billion USD, marking the largest decrease in over 12 years. Analysts, however, think speculators may take this opportunity to rebuild short positions, similar to previous post-intervention patterns. The Head of Japan FX Research at Bank of America stated that coordinated intervention may lead the Bank of Japan to accelerate its rate hikes and expressed an optimistic outlook for the yen, adjusting the year-end exchange rate forecast from 152 to 149.
Traders currently estimate the probability of the Bank of Japan raising rates to be slightly above 50%, but growing political pressure to support the bond market is making the central bank's tightening path more complicated. Intouch Capital's Head of Asia FX pointed out the post-intervention movement in USD/JPY is unsurprising, as such moves are common when interventions lack interest rate differential support. If the exchange rate again reaches intervention levels, it could trigger a new round of actions.
The market focus is turning to Wednesday's release of the US Consumer Price Index data, which may reflect the impact of war on price pressures. This will be followed by Thursday's PPI data and Friday's retail sales figures, providing further clues on the inflation trend. As hopes for a peace agreement between the US and Iran fade, oil prices continue to rise—briefly hitting a one-week high—with the US dollar index fluctuating around 99.80, retaining Monday's gains.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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Intervention effect fades as yen approaches 160, market focuses on U.S. inflation data

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