USD/JPY has hit a session low, swings from a high above 150.10 to under 149.60

The initial move after the Tokyo inflation data was for yen weakness:

• Tokyo February headline CPI +2.9% y/y vs. +3.2% expected

In that post I made note that the weaker CPI reading fed through to a weaker yen as it takes off some pressure for nearer-term BoJ rate hikes. I’ve just printed out that post, torn it up, and flushed it down the toilet.

Yen bouncing back:

Since the CPI data we’ve had:

• Japan January retail sales +3.9% y/y (expected +4.0%)
• Japan January preliminary industrial output-1.1% m/m (vs. expected -1.2%)
• BoJ’s Uchida says Japan’s economy on a moderate recovery path – some weak spots

There’s not a lot there that appear to be the smoking gun for the yen bounce – I guess Uchida fits the bill more closely than the data. Let me know what you think in the comments.

This article was written by Eamonn Sheridan at www.forexlive.com.