Commerzbank said Japanese authorities appeared to intervene around USD\/JPY 157 after the pair briefly reached 160.72. It added that price action suggested efforts to keep the exchange rate near 157 during Golden Week.<\/p>\n
Tokyo inflation data showed the headline rate rose from 1.4% to 1.5%. On a seasonally adjusted basis, the annualised 3\u2011month change was 2.2%, above the Bank of Japan\u2019s target, but this was attributed to higher energy prices.<\/p>\n
Core inflation, defined as excluding food and energy, fell from 1.4% to 1.0%, the lowest level in over a year. The report said 0.1 percentage points of the drop was linked to a one-off effect from kindergarten fees.<\/p>\n
Commerzbank said conflict-related sentiment could keep core inflation low even if energy lifts the headline rate. It said this could reduce the likelihood of Bank of Japan rate rises and add pressure on the yen.<\/p>\n
We are seeing the familiar pattern of Japanese authorities intervening as USD\/JPY tests the 170 level. This mirrors the situation back in spring 2025 when they tried to establish a line at 157. The underlying pressure on the yen clearly remains a significant issue.<\/p>\n
The latest Tokyo Core CPI data for April 2026, which came in at 1.9%, reinforces this view of yen weakness. This is well below the BoJ’s target and shows a clear cooling from the 2.5% levels seen at the start of the year. It confirms the pattern we observed in 2025, where energy costs temporarily masked soft underlying price pressures.<\/p>\n
The Bank of Japan has little reason to pursue aggressive rate hikes with this inflation backdrop, despite their minor policy shift earlier this year. Meanwhile, recent statements from the U.S. Federal Reserve suggest rates will remain elevated, with the Fed Funds Rate holding firm above 5%. This substantial interest rate differential continues to be the primary driver of capital flows out of the yen.<\/p>\n
This environment suggests long-volatility strategies on USD\/JPY could be profitable, as we expect sharp but short-lived reversals from any official intervention. We believe buying long-dated USD\/JPY call options or call spreads remains a viable strategy to position for further yen depreciation. These positions benefit from the underlying trend while capping downside risk from sudden, temporary yen strengthening.<\/p>\n","protected":false},"excerpt":{"rendered":"
Commerzbank sees Japan intervening to cap USD\/JPY near 157; softer core inflation may weaken yen.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-46617","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46617","targetHints":{"allow":["GET","POST","PUT","PATCH","DELETE"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=46617"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46617\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=46617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=46617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=46617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}