Yen traders buffeted by suspected intervention once more have a number of speed bumps to navigate before a showdown with the Bank of Japan (BOJ) on the last day of the month.
Despite the boost from the apparent intercession and a favorable drop in U.S. bond yields that weighed on the broader dollar, the yen still ended last week up less than 2% against the greenback. That suggests it’s going to need more help from Japanese authorities in order to decisively break out of its downward trend.
The yen’s 11% decline this year is adding to Japan’s inflationary pressures, keeping open the possibility that the BOJ will increase interest rates on July 31 for just the second time since 2007. Traders are focusing on data Friday that’s expected to show the nation’s inflation rate edged up to 2.9% in June, according to a Bloomberg survey of economists, well above the BOJ’s 2% target.