USD/JPY bulls poke 32-year high above 147.00, Japan intervention, US data in focus

USD/JPY prints mild gains around 147.30 while printing the eight-day uptrend near the highest levels since 1990 as Tokyo opens on Friday. In doing so, the yen pair stays on the bull's radar, despite retreating from a multi-year high before a few hours.

The quote’s latest inaction could be linked to the firmer US Treasury yields and the Japanese policymakers’ rejections to confirm the market meddling. Also, anxiety ahead of the US Retail Sales for September and the preliminary readings of the Michigan Consumer Sentiment Index (CSI) and the University of Michigan’s (UoM) 5-year Consumer Inflation Expectations for October, appear to act as an additional trading filter.

That said, the US 10-year Treasury yields remain firmer around 3.96% after snapping a two-day downtrend to poke the October 2008 levels. The firmer bond coupons portray the market’s recession fears and rush towards the risk-safety but failed to propel the US dollar the previous day.

Earlier in the day, Japanese Finance Minister (FinMin) Shunichi Suzuki and Bank of Japan Governor (BOJ) Haruhiko Kuroda resisted while signaling any market invention to come from Japanese policymakers due to the latest slump in the yen. “Want to take appropriate action versus excess fx volatility,” said FinMin Suzuki when asked whether Japan could intervene to prop up yen. BOJ’s Kuroda, on the same line, mentioned that the pace of Japan's economic recovery still slow so BOJ must continue supporting economy.

Alternatively, the International Monetary Fund (IMF) urged the Asian central banks to tighten the monetary policies further, per Reuters, which in turn should have probed the USD/JPY buyers.

On Thursday, a third consecutively softer US Consumer Price Index (CPI) jostled with the 40-year high Core CPI to challenge the market’s outlook and drowned the US Dollar Index (DXY) despite hawkish Fed bets. Talking about the data, the DXY dropped 0.70% to 112.45 by the end of Thursday’s North American session. It’s worth noting that the US CPI rose to 8.2% versus 8.1% market forecasts but eased as compared to the 8.3% prior. The CPI ex Food & Energy, mostly known as the Core CPI, jumped to 6.6% while crossing the 6.5% expectations and 6.3% previous readings.

Moving on, Japan’s meddling is awaited with a keen eye and could quickly drag the USD/JPY. Also important are the consumer-centric data from the US and risk catalysts like Fed bets, recession chatters and covid updates.

Technical analysis

USD/JPY’s retreat from the highest levels since 1990 top surrounding 147.70 joins the overbought RSI to challenge the bulls. Also acting as an upside filter is an ascending resistance line from late Apri, around 148.95 by the press time.