• Yen's rally to seven-month high weighs on dollar ahead of US CPI

• USD/JPY has dropped from 154.31 to 152.89, Tuesday, EBS data shows

• The yen's sudden surge is upsetting the carry trade faithful

• USD/JPY on course to end the week below the broken 154.78 Fibo, that would be bearish

• 154.78 Fibo is a 38.2% retrace of the 139.89 to 163.99 (April to July) rise

• Fin Min Katayama emphasized that Japan and the US remain aligned on FX policy

• BOJ commentary, nudge from Bessent cements Japan Sept rate hike

• USD/JPY and EUR/JPY tend to move in tandem, log correlations are high above +0.5

Daily Chart


Weekly Chart


Correlation Chart

(Martin Miller is a Reuters market analyst. The views expressed are his own)