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The Japanese yen has weakened toward a two-week low against the U.S. dollar, pressured by consumer price index data and an upcoming Bank of Japan policy meeting.
In principle, domestic inflation data should clarify the central bank's policy path. The yen's direction suggests the market has already decided where that path leads.
The case for watching the mechanism: CPI prints feed directly into the Bank of Japan's inflation assessment, which is the stated basis for its policy decisions. The sequence the tape is processing is compressed.
Data is out, the yen has weakened, and the meeting is ahead. What's changed is the ordering. Normally a currency reacts to policy, not ahead of it.
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