USD/JPY Charges Towards 160 as U.S. Dollar Bulls Regain Momentum

USD/JPY is climbing back towards its resistance zone of 160 after a brief dip following joint intervention by Tokyo and Washington. The pair had been pulled from 164 to 155, but U.S. dollar bulls are now pushing it back towards the danger zone.

The yen has largely given back its gains from the intervention, with investors continuing to borrow cheaply in yen to buy higher-yielding dollar assets. This is putting renewed pressure on the Japanese currency.

A key test for USD/JPY will come when U.S. CPI data is released later this week. A hotter-than-expected reading could strengthen expectations of a September rate hike and push Treasury yields higher, making dollar assets more attractive and potentially lifting USD/JPY above 160.