JPY: Inflation cooldown not helping – ING
The yen has been one of the biggest losers this week due to its sensitivity to any hawkish repricing in the US Dollar (USD) curve, ING's FX analyst Francesco Pesole notes.

The yen has been one of the biggest losers this week due to its sensitivity to any hawkish repricing in the US Dollar (USD) curve, ING's FX analyst Francesco Pesole notes.

Any exploration above 150.0 to be relatively short-lived

"Not helping the JPY’s case overnight were some lower-than-expected Tokyo CPI data. The headline reading slowed from 2.6% to 2.5% versus expectations of 2.8%, and the core measure excluding fresh food and energy surprisingly dropped to 2.5%, the lowest since March."

"Market pricing for an October Bank of Japan hike is around 14bp, and today’s data may prevent hawkish bets from building up for now. But we favour some unwinding of this week’s dollar strength and the yen should be a main beneficiary of markets re-cementing expectations for two Fed cuts by year-end."

"Our view is for any exploration above 150.0 to be relatively short-lived, with still ample downside room for the pair."


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