The US Dollar rallies to 147.60 highs with the Yen on the defensive ahead of Japan's CPI data.
Investors' fears of a hawkish Powell at the Jackson Hole meeting keep the US Dollar buoyed.
Japanese inflation is expected to have eased in July, which might put BoJ's tightening plans into question.
The US Dollar accelerated its recovery against a weaker Japanese Yen on Friday. USD/JPY’s rebound from Wednesday's lows right below 146.90 has extended to levels near 147.65, although, from a broader perspective, the pair maintains a choppy and volatile behaviour, ranging between 146.70 and 148.00
The Greenback is holding recent gains on Thursday, with the focus on preliminary US PMI figures and Fed Powell’s speech on Friday, while in Japan, July’s CPI data might give further clues about the outcome of the next BoJ meeting
Traders wary of selling Dollars ahead of Powell
Investors are wary about placing large US Dollar shorts ahead of Fed Powell’s speech at the Jackson Hole Symposium on Friday. Fears that the Fed chief might deliver a not-dovish-enough message prioritising the inflationary risks of tariffs above the signals of labour market deterioration are buoying the USD on Thursday.
Before that, the US preliminary S&P Global PMIs and Jobless Claims figures will provide further insight about the economic growth prospects and the strength of the labour market. In the current context, the USD is likely to be more sensitive to positive readings than to negative ones.
In Japan, National Consumer Price Index figures are expected to show that inflation moderated somewhat in July. In this case, the risk is on a softer-than-expected CPI that might cast further doubts on BoJ’s tightening plans, and add pressure on the JPY.
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