Markets feel as if they’re on hold now ahead of tomorrow’s US CPI update. This has gained additional significance following comments from Federal Reserve members last week. Some have said that the recent stalling of the decline in inflation, together with robust economic data releases, means that it’s far too early to consider cutting rates. That was the view expressed by Dallas Fed President Lorie Logan last Friday. Earlier in the week, Neel Kashkari said there should be no rate cuts this year if inflation continued to move sideways. Bear in mind that Headline CPI has so far failed to break below 3.0% year-on-year, a level first hit back in June. The consensus expectation is that Headline CPI for March will rise to +3.4% year-on-year, from +3.2% previously. How could this affect the dollar, and in particular the USDJPY. We know that the Bank of Japan, along with many Japanese policymakers, are unhappy with the yen’s weakness. There’s been little movement in the pair this morning and its currently hovering below 152.00 area. Last week, Hiroshi Watanabe (formerly Japan’s ‘Mr Yen’) said there would be no FX intervention from Japan until the USDJPY hits 155.00. but following his comments, Tatsuo Yamazaki, a former Japanese FX official who oversaw a major intervention twenty years ago, warned that a move over 152.00 was likely to trigger intervention. Could tomorrow’s CPI update trigger an early test of the latter?