The yen remains vulnerable to sharp movements and government intervention, even after its rally at the start of this week, as key U.S. data and central bank meetings loom large among potential catalysts.
U.S. inflation figures set to be released Wednesday are expected to show price growth accelerating for a second month in August versus a year earlier. If headline price growth outpaces the consensus for a 3.6% gain, reignited speculation over another U.S. interest rate hike might boost the dollar and return the yen to fresh year-to-date lows.
The pace of any yen slump will likely be key to whether officials at Japan’s Ministry of Finance respond with ramped-up verbal warnings or consider action.