Can Japan’s upcoming inflation figures dislodge the Yen from near 158.00?

• Range-bound trading persists in USD/JPY, which closes near 158.00 again within the band maintained since October 1.
• Swaps imply a probability below 5% for a BoJ hike on October 30, against nearly 80% for December 18.
• Ahead of the BoJ's October 30 policy decision, Japan releases national CPI data on Thursday.

The Yen drew little support on Tuesday from lower Crude Oil prices or Dollar weakness against other currencies, leaving USD/JPY near the closing levels seen through most of October. After slipping from around 158.50 to its session low, the pair retraced roughly half of the decline.

Yen buyers have no BoJ rate increase to factor in before December, according to swap pricing. Traders assigned a probability of less than 5% to a hike from 1.25% on October 30 and around 80% to an increase on December 18 after Bank of Japan (BoJ) Governor Ueda told parliament on Monday that underlying inflation was very close to the 2% target.

Tuesday's peak, slightly above 158.50, marked USD/JPY's highest level since Finance Minister Katayama warned on October 15 that Japan was prepared to intervene in the currency market again. The pair failed to sustain that level. Prime Minister Takaichi, meanwhile, denied responsibility for the Yen's weakness.

Which data releases are next?

An acceleration in export growth to 20.1% year-on-year from 19.3% is forecast in Japan's September trade data, due at 23:50 GMT on Tuesday. Thursday brings national CPI excluding fresh food at 23:30 GMT, with inflation expected to rise to 2.1% from 1.7%. Those readings sit on either side of the BoJ's 2% target.

The final US inflation readings before the Fed's October 28 decision will be the University of Michigan inflation expectations, due at 14:00 GMT on Friday. One-year expectations are forecast to remain at 4.7%, while five-year expectations are projected at 3.5%. The Fed's decision precedes the BoJ's by two days.

What do the charts indicate?

USD/JPY has closed no more than 75 pips away from 158.00 on every trading day since October 1, while its 50-day Exponential Moving Average (EMA) lies just a few pips from that level. October's trading band stretches from slightly below 157.00 to slightly below 159.00, with the 200-day EMA positioned just above 157.50.

Daily price chart: USD/JPY