USD’s Data-Driven & JPY Risks
USD/JPY has a pivotal resistance at 160 where its 100-day moving average is located.
Group Research - Econs, Philip Wee11 Aug 2026
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The USD is trying to stabilize after last week’s coordinated FX interventions by the US and Japan to stabilize the JPY, and the surprisingly negative US nonfarm payrolls. With Fed Chairman Kevin Warsh refusing to provide forward guidance, markets cannot confidently extrapolate last Friday’s payroll shock into the September FOMC rate decision.

Hence, traders are awaiting the August 12 US CPI data release before making the next move. USD bulls are looking at a rebound in energy prices to lift July CPI and to undo a portion of the NFP-led decline. Conversely, CPI inflation may disappoint because July’s average energy prices did not deviate far from those in June. If Brent crude prices stabilize around $70-100 per barrel, it reduces the geopolitical tail risks around the US-Iran conflict and keeps the FX market highly data-dependent.

Meanwhile, markets are not overly bothered with President Donald Trump’s renewed efforts to revive global tariffs and his push to remove Fed Governor Lisa Cook from office. Markets are not pricing in worst-case scenarios because the US courts have already proven they will intervene. Right now, the focus is on corporate profits. With the US economy remaining resilient and avoiding a recession, investors are leaning into strong earnings growth rather than political headlines.

Instead, Warsh’s abrupt transition to low or no guidance is causing frustration and anxiety on Wall Street, which has grown accustomed to central bank handholding since the global financial crisis. Investors will scrutinize his comments at the August 27-29 Kansas Fed’s Jackson Hole Symposium to see whether he will formalize speculations about setting fewer FOMC meetings and retiring the dots and Summary of Economic Projections. 

Hence, we should not be too quick to conclude that USD/JPY’s rebound from its post-intervention low of 155 is a failure. Although markets viewed Washington’s participation as an act of economic self-intervention rather than just a diplomatic favour to an ally, the joint intervention also demonstrated that the JPY’s weakness is intertwined with the upward pressure on US long-term bond yields. The futures market has increased the odds of a September rate hike to more than 60% from 20% for the Bank of Japan and reduced those for the Fed to 50% from 72%.

Economic Policy Minister Minoru Kiuchi pushed back against market concerns that Japan is adopting a reckless fiscal stance or pressuring the BOJ to keep rates artificially low. Vice Finance Minister for International Affairs Atsushi Mimura has laid out a firm stance emphasizing bilateral cooperation and unconstrained intervention capacity. Finally, USD/JPY has a major resistance at the psychological 160 level where its 100-day moving average is also located.

Quote of the Day
“We're our own dragons as well as our own heroes, and we have to rescue ourselves from ourselves.”
     Tom Robbins

August 11 in history
On August 11, 2015, Greece and its international creditors reached a technical agreement "in principle" on a third rescue package worth up to €85 billion ($93 billion), following an all-night negotiating session in Athens.







Philip Wee

Senior FX Strategist - G3 & Asia
philipwee@dbs.com

 

 
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