Ministry of Finance Data to Reveal Japan's Yen-Buying Efforts
Japan's Ministry of Finance is set to release data on September yen-buying efforts, which could provide insight into whether Tokyo intervened in the foreign exchange market after a reported rate check. The move comes as the USD/JPY currency pair tests resistance at 159 and traders weigh the risk of intervention.
The Ministry will publish the amount of Yen bought between August 27 and September 28, with a zero reading suggesting reliance on verbal guidance and contacts with Washington. A large figure would imply defense of the yen near 159.
Developments also depend on upcoming data releases, including Japan's Tankan survey, which is forecast to show an improved outlook for large manufacturers, and Tokyo CPI, expected to jump to 2.4% from 1.8%. The Bank of Japan policy rate stands at 1.25%, and policymakers may consider another hike due to rising inflation pressures.
With strong US economic data also on the horizon, including a forecast 3.4% core PCE, traders favor holding long positions on USD/JPY above key support floor 156.50. However, tight risk controls are advised as heavy intervention risk lies near 159.