Yen traders buffeted by suspected intervention once more have a number of speed bumps to navigate before a showdown with the Bank of Japan (BOJ) on the last day of the month.
Despite the boost from the apparent intercession and a favorable drop in U.S. bond yields that weighed on the broader dollar, the yen still ended last week up less than 2% against the greenback. That suggests it¡¯s going to need more help from Japanese authorities in order to decisively break out of its downward trend.
The yen¡¯s 11% decline this year is adding to Japan¡¯s inflationary pressures, keeping open the possibility that the BOJ will increase interest rates on July 31 for just the second time since 2007. Traders are focusing on data Friday that¡¯s expected to show the nation¡¯s inflation rate edged up to 2.9% in June, according to a Bloomberg survey of economists, well above the BOJ¡¯s 2% target.
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