Friday's PCE report gains significance.

Attention turns to the 'unthinkable possibility' of global inflation re-accelerating thanks to higher inflation prints from Canada and Australia this week. Currently, the possibility is contained, but if US PCE is reported higher on Friday. We could see concern grip the market.

USD JPY has breezed past 160, Bank of America thinks 165 is the new intervention threshold. But Adam Button (Forex live) thinks it's very bold to chase USD JPY higher here, as the market has heightened awareness of the possibility of intervention.

My current preference is to see 'slightly soft' US GDP data and 'soft' PCE data, which would likely restore the bias for 'risk on, soft landing trades'

But as traders we must alter our views according to whatever the data and sentiment is suggesting.

Feel free to email any questions: johnelfedforexblog@gmail.com