Dollar fights back as US stocks continue to advance- USD/JPY rebounds

An earlier update here noted the reaction in the markets to the US CPI data and in specific terms to the FX moves. Well, since then the USD/JPY did fall further and it did drop below 156 at one point. However, it is now rebounding back towards 156.50. The slide in US yields which followed that CPI data has not exactly corrected itself though and the US stock markets are still being driven by the bulls it seems. To be honest, given the earnings reports earlier on that is not exactly out of place, but the pace of the move is quite alarming. That said, stocks were looking for a good excuse to rise and the better earnings and drop in yields have also helped the moves. Gold is also lower now and that might surprise some. The EUR/USD is also doing as expected and drifting back down towards where it was before the CPI data arrived, as the GBP/USD falls back towards the breakout level at 1.2250. The USD/JPY is right now at 156.44