Yen Slides Toward 160.00 With Fed Speakers And US PPI Ahead

The 160.00 level is within reach of USD/JPY for the first time since early September, with Fed speakers and US producer prices still to come before the weekend. USD/JPY has left the range it held for seven weeks and reached just under 160.00, its highest since September 2. It's trading a little below that high, near the top of Wednesday's range.

The October Consumer Price Index (CPI) beat forecasts with a 0.4% rise, and Fed Governor Waller called a hike at the December 8-9 meeting likely. Futures now give a quarter-point move there odds near 90%. The Fed's rate is 3.75%-4.00% against 1.25% at the Bank of Japan (BoJ), a gap of at least two and a half points that pays holders of Dollars over Yen.

The BoJ is expected to move too. BoJ board member Takata voted for 1.50% in October's 8-1 decision, and most economists expect the rest to join him at the December 17-18 meeting. A quarter-point from each central bank nine days apart would leave the gap, and the reason to hold Dollars over Yen, exactly where it is.

On the calendar

Japan's October corporate goods prices are due at 23:50 GMT on Wednesday, and third-quarter Gross Domestic Product (GDP) follows at 23:50 GMT on Sunday. Both feed the BoJ's December decision, the Japanese side of the gap.

US jobless claims come at 13:30 GMT on Thursday, with 195K forecast against 189K, and Cleveland Fed President Hammack opens a day of six Fed speeches at 14:00 GMT. The US Producer Price Index (PPI) for October lands at the same hour on Friday, with a 0.4% rise forecast against September's 1.3%. With a quarter-point Fed move priced, both bear on whether a half-point is possible.

On the charts

The break takes USD/JPY above the 156.00-159.00 range it had held since late September, and it has recovered nearly all of the fall from the September 2 high near 160.50 to the September low near 153.00. The last two times it traded above 160.00, at the end of July and at the start of September, it fell more than five Yen within a week.