The latest yen-tervention efforts are a step out of the norm as Japan looks to be trying out a new strategy. And that is to bank on softer US data in driving down USD/JPY in particular. From earlier: BOJ data suggests Japan also intervened in the FX market on 12 July
They stepped in on Thursday following the US CPI report and did so again on Friday after arguably 30 mins following the US PPI report. On the latter, it seemed like they waited for a bit just to make sure that markets were not going to respond against them as the producer price numbers were hotter than expected.
Given the circumstances, there will be more intrigue surrounding the US retail sales data later today.
It’s not just one that is going to attract the attention of traders looking to price in the Fed outlook. But it is also one that could see USD/JPY get shoved lower by Japan, especially if the numbers miss on estimates.
A softer report would mean slowing consumption activity and bolsters the narrative for the Fed to cut sooner. In turn, that should keep the dollar pinned down and Tokyo officials might see that as another opportunity to step in again.