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Gauging the USD/JPY reaction to US PCE data

Normally the USD/JPY would be front and centre to any positive reaction in the dollar to strong US data and particularly to this very important PCE data. Well, right now that might not be the case. That is because the markets are wary of pushing the dollar higher above 152. That appears to be a level that Japanese authorities are not comfortable with, judged by all their most recent rhetoric. However, it is unclear whether the BOJ has dollar offers in place on the interbank portals around that level. So, right now the markets are trading this very curiously and maybe reluctant to force the BOJ hand, in what could be treacherously thin price action this afternoon. Also to note; there will be no US bond or stock markets to help guide the USD/JPY, as is often the case. So, in terms of a pure dollar reaction, it might be better to look elsewhere, to the GBP/USD and the EUR/USD. Conversely, weak PCE data does open the prospect of a fall below 151. We know the dollar has held that level repeatedly so far this week, but a lower PCE reading today might see it crack. We shall have to see what emerges here, at 12.30pm GMT. Meantime, the USD/JPY is trading largely unchanged from earlier this morning, currently at around 151.32 

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