Japanese Yen at Risk as Intervention Looms Ahead of US CPI Report

The Japanese yen saw significant pressure on Monday, allowing yen crosses to recover some of their post-intervention losses.

However, traders are aware that Japan is prepared to intervene again and the US Treasury has joined forces with the Ministry of Finance to support the yen.

This changes the dynamic, making it a case of traders 'playing with fire' as they bet on further yen weakness.

The underlying carry dynamics still favor yen weakness, but the prospect of another coordinated intervention means the risk is no longer just about getting the direction wrong.