Japanese Yen: Supported below 160 against US Dollar – Scotiabank

Scotiabank strategists Shaun Osborne and Eric Theoret highlight that the Japanese Yen (JPY) is modestly stronger versus the US Dollar (USD), helped by upbeat domestic data including robust retail sales and industrial production. Policy focus is on the Bank of Japan's (BoJ) September meeting, with officials expected to act appropriately. In USD/JPY, price action shows firm resistance above 160 and a near-term range supported around 159.00–159.50.

Yen supported by data and key levels

“The JPY is up 0.2% vs. the USD and outperforming most of the G10 currencies with the exception of NOK and SEK, as all three attempt a modest retracement of Friday‘s losses that had left them underperforming in response to Fed Chair Warsh’s Jackson Hole speech.”

“The latest domestic data releases have been constructive, with a sizeable surge in July retail sales and an unexpected expansion in industrial production—offering a notable beat vs. expectations of a chunky m/m decline.”

“The outlook for relative central bank policy remains front and center into the BoJ‘s September 18 decision, with media reporting that US Secretary Bessent expects Gov. Ueda ’to do the right thing. Board member Takata is scheduled to speak later this week.”

“In USD/JPY, the latest price action reveals clear resistance above the psychologically important 160 level. Prior 159.50 resistance looks to be offering shortterm support, and we expect the 159.00 level to mark the lower bound of the nearterm range.”