Market Ignores Soft US Data, Faster BOJ Hike Talk

The yen has been receiving several tailwinds in recent weeks, but USD/JPY's refusal to respond suggests the market may be looking beyond near-term Fed and BOJ pricing.

Softer US data and faster BOJ hike talk have failed to boost the Japanese yen. The US non-farm payrolls and soft US CPI report saw Fed rate hike pricing pared over the next year, while speculation intensified that the Bank of Japan could move rates earlier than markets had previously expected.

This should be bullish for the yen, but the price action is not playing ball. USD/JPY has remained sensitive to Treasury yields, with higher energy prices potentially adding to yen pressure.