USD/JPY Bulls Hit by Intervention Risks and US CPI Anxiety

The Japanese yen took a hit on Monday, allowing yen crosses to recover some of their losses following recent intervention. However, the threat of further coordination between the Ministry of Finance (MOF) and the US Treasury, along with Wednesday's US Consumer Price Index (CPI) release, has put USD/JPY bulls on notice.

The yen was the weakest FX major on Monday, falling against all other currencies and allowing yen pairs to regain some ground. GBP/JPY rose by around 1% to a one-week high, while USD/JPY gained 0.9%, its best day since January. However, analysts suggest that this recent move may be less like a fresh bout of US dollar strength.

The market is watching Wednesday's CPI release closely, as it could impact the Federal Reserve's interest rate decisions and ultimately influence the value of the US dollar. Meanwhile, coordination between the MOF and US Treasury raises concerns about potential intervention in currency markets.