[USD/JPY] Trump Rally and U.S. CPI

Last week, the dollar rose across the board after Donald Trump was elected president. The dollar-yen pair (USD/JPY) initially dropped to 151.29 yen, following reports favoring Harris, but later climbed to 154.71 yen. However, just before reaching 155 yen, comments from Finance Official Mimura about curbing yen weakness led to a reversal. As the FOMC meeting also approached, stronger dollar-selling took place, and USD/JPY dropped to 152.15 yen, returning to roughly the same level it started at for the week.

Federal Reserve Chairman Powell gave a slightly hawkish speech, expressing some concern about inflation under the new administration, but he did not mention stopping rate cuts. Depending on the upcoming U.S. CPI and PPI results this week, there may be more selling of the dollar to adjust its value. However, with the impact of the Trump Rally still present, the downside may be limited.

The 155 yen level is seen as strong resistance due to concerns about possible verbal intervention.