BOJ Intervention Gives Back Nearly Half of Gains as Japan Awaits Inflation Data

The Bank of Japan's intervention in the foreign exchange market has given back nearly half of its gains, leaving investors wondering whether Tokyo will defend the current level or let the Japanese Yen depreciate further.

On July 30 and 31, the BOJ sold a record 8.45 trillion Yen, lowering the USD/JPY rate by around nine Yen to reach a low near 155.00.

However, over the past week, the pair has given back more than four of those nine Yen, with the market now trading just beneath 159.50.

The next few days will be crucial in determining the fate of the Japanese economy, as key inflation data is set to be released on Wednesday and Thursday.