USD/JPY Pulls Back to 160 as US Economic Data Disappoints
The USD/JPY pair has pulled back to 160 due to softer-than-expected US economic data and a lack of fresh catalysts. The dollar's advance on Tuesday was tempered by weaker-than-expected August ISM manufacturing numbers and lackluster JOLTS data.
Despite the weak data, an elevated ISM prices component may help preserve the Fed's hawkish bias, limiting the scope for a deeper dollar correction. However, rising oil prices and expanding fiscal deficits continue to keep the yen defensive.
In Japan, rising debt burdens and higher interest rates remain pressing challenges. Yen bulls expecting a more aggressive BOJ tightening path under US pressure for hikes and higher domestic inflation may be disappointed by government claims that fiscal discipline and stronger growth can resolve debt concerns.
As the USD/JPY remains cautiously bullish within an ascending channel, comments from Finance Minister Satsuki Katayama have kept intervention concerns alive. A close above 160.43 would expose resistance at 160.63 and the April 30 intervention high at 160.72.