With markets in somewhat of a holding pattern on Wednesday but bias for risk appetite remaining firm, USD/JPY drifted to fresh weekly peaks, but the near-term term focus is on the May 14 high at 156.80, a break of which would likely open the door to 157.50, where intervention is suspected to have taken place.

As has been covered at length, the preference among traders is to be long carry, which is an environment where both the yen and the franc can be expected to underperform in and Wednesday’s session was no exception.

What’s more, a hawkish RBNZ - who had considered a rate hike - and UK inflation report, with closely watched services CPI falling to 5.9% versus the BoE projection of 5.5%, gave bond yields a lift, further adding pressure on the low-yielding yen and keeping bears very much in charge.

Looking ahead, the upcoming U.S. PMI survey will garner attention.
Though, while U.S. data has been softening of late, a continuation of this trend is unlikely benefit the yen significantly.
Dollar downside is likely better expressed versus GBP or AUD.

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