JPY Surges on BOJ Hints, Waller's Inflation Caution

The Japanese yen has made a significant move in the FX market, strengthening sharply from 160 to as low as 155.30 overnight, a 5 big figure move.

This is part of a broader trend where the US Dollar weakened by 0.9% through that period, while Asian FX appreciated by 0.4%.

It's unclear whether the moves in USD/JPY were driven by FX intervention, but Bank of Japan data for Wednesday do not suggest intervention was involved.

Bank of Japan Board Member Takata has hinted at a potential interest rate increase as large as 25bps or more, which could further strengthen the yen.

Fed Governor Waller's speech yesterday also contributed to the Dollar's weakness and the JPY's strength, as he expressed a preference for leaving rates unchanged if inflation continues to slow.