USD/JPY flows: The return of jawboning

Here we have the resumption of jawbone easing from Japan as USD/JPY getting closer to the 160 figure. The higher than expected headline CPI did help the JPY and see early gains above 159 reversed. The Japan May headline CPI has come in higher at 2.8% y/y, less fresh food came in 0.1% lower than expected at 2.5% while ex fresh food and enrgy continue to tread lower to 2.1% from 2.4% prior. This CPI would be welcoming by the BoJ to support their next step in tightening but looks like most inflationary pressure comes from transitory items.

USD/JPY is trading unchanged at 158.89 after touching a high at 159.12.