USD/JPY extends its recovery to 147.60 amid generalised Yen weakness
- 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.
Economic Indicator
S&P Global Composite PMI
The S&P Global Composite Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging US private-business activity in the manufacturing and services sector. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for USD.
Read more.Next release: Thu Aug 21, 2025 13:45 (Prel)
Frequency: Monthly
Consensus: -
Previous: 55.1
Source: S&P Global
Economic Indicator
National CPI ex Fresh Food (YoY)
Japan’s National Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households nationwide excluding fresh food, whose prices often fluctuate depending on the weather. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Read more.Next release: Thu Aug 21, 2025 23:30
Frequency: Monthly
Consensus: 3%
Previous: 3.3%
Source: Statistics Bureau of Japan
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