The yen maintains modest gains against the US dollar after July’s Consumer Price Index came in at just 0.1% month-over-month. The USD/JPY pair is trading around 159 per dollar, a significant improvement from the 164 level hit in late July. A coordinated intervention between the US and Japan, totaling approximately 8.45 trillion yen (about $53 billion), was needed to reverse the yen’s decline. This cooler CPI reading gives the Federal Reserve room to consider easing, which could narrow the interest rate differential that has been driving yen weakness. The 159 level has become a psychological battleground for forex traders.
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