Japan’s inflation figures are next for a Yen stuck near 158.00

Cheaper Crude Oil and a weaker Dollar elsewhere did little for the Yen on Tuesday, and USD/JPY ended about where it has ended most of October. It fell from about 158.50 to the session low and recovered about half of that drop.

Bank of Japan (BoJ) Governor Ueda told parliament on Monday that underlying inflation is very close to the 2% goal. In swaps, traders translated that into a less than 5% chance of a hike from 1.25% on October 30 and about 80% for December 18. That leaves Yen buyers no BoJ hike to price before December.

Prime Minister Takaichi rejected blame for the weak Yen, and Finance Minister Katayama said on October 15 that Japan is ready to act in the currency market again. Tuesday's high just above 158.50 is USD/JPY's highest since that warning, and it didn't hold.

On the calendar

Japan's September trade figures come at 23:50 GMT on Tuesday, with exports forecast up 20.1% from a year earlier after 19.3%. National CPI excluding fresh food follows at 23:30 GMT on Thursday, forecast at 2.1% after 1.7%, with the BoJ's 2% goal between the two.

University of Michigan one-year inflation expectations at 14:00 GMT on Friday are forecast unchanged at 4.7%, with five-year expectations at 3.5%. They're the last US inflation figures before the Fed's October 28 decision, two days before the BoJ's.

On the charts

Every daily close since October 1 has been within 75 pips of 158.00, with the 50-day Exponential Moving Average (EMA) within a few pips of it. The 200-day EMA is just above 157.50, and the October range runs from just under 157.00 to just under 159.00.

USD/JPY daily chart