USD/JPY

In this week’s edition, we discuss the dollar’s latest big gains following this week’s central bank meetings, among other things.

Is the BoJ undoing the government’s attempt to shore up the yen?

As for other central bank meetings: within the next 20 hours markets will hear from the BOJ, SNB, Norges Bank, BOE, and SARB.

Rising yields ahead of the FOMC meeting has seen the BOJ announce bond purchases, and implied volatility has risen notably for the next 24-hours.

With inflation remaining stubbornly elevated and fears of a recession rising, where are there still opportunities in the market?

A notable rise of downside protection, and increase in implied volatility over the next week for USD/JPY suggests traders are taking precautions.

The BOJ meets next week. Watch for the central bank to use additional tools to try and strengthen the Yen.

Jerome Powell will be hoping that inflation data, released just 90 minutes before his Jackson Hole speech, softens as expected.

DAX rises post GDP data, IFO business climate up next. USD/JPY slips on USD weakness as Jackson Hole begins and ahead of US GDP and jobless claims figures.

July housing data finished up this week with worse than expected New Home Sales and better than expected Pending Home Sales.

Whilst US PMI data disappointed, it’s not as though the economic deterioration we’re witnessing didn’t come without plenty of warning. And the upshot all this is that it's deflationary.

Inflation continues to rise in Japan, albeit at a much slower pace than its peers. But we don’t expect a rate hike any time soon.

The US dollar has perked up following yesterday’s FOMC minutes, and that has placed gold and USD/JPY onto our radars in anticipation of continued dollar strength.

The July headline Retail Sales print was slightly weaker; however, the core print was stronger. Due to the mixed data, USD/JPY continued its overnight path higher as price broke out of a descending wedge.

With peak inflation remaining a key theme for traders, attention now turns to UK CPI data at 07:00 BST.

With the odds of 75 basis point hike having dropped, the Fed is careful not to push too hard against that...