The US dollar against the Japanese yen could rise towards 150 if Federal Reserve Chair Powell reinforces a hawkish stance at the upcoming Jackson Hole conference later this week.
Should Powell maintain his position on curbing inflation, the momentum towards this key level for the currency pair is likely to remain unchanged.
The surge in US real yields has already exerted upward pressure on the US dollar.
The 10-year US Treasury real yield briefly exceeded 2% yesterday for the first time since 2009.
The mere threat of interest rate hikes at the upcoming Jackson Hole conference should be enough to keep US short-term yields on the rise.
For the yen, Friday’s CPI data could amplify calls for the Bank of Japan to end its yield curve control policy.
However, so far, the Bank of Japan has remained deaf to these calls.
