• USD/JPY oscillates in a narrow range around 145.52, down 0.02% for the day.
• Japan’s economic growth came in at 1.5% QoQ, versus 0.8% expected and 0.7% prior.
• Traders turn cautious amid the fear of FX intervention by the BoJ.
• US Retail Sales came in above expectations, climbed by 0.7% MoM, higher than the 0.4% estimated.
• Market players will keep an eye on the FOMC minutes on Thursday.

The USD/JPY pair remains confined around the 145.45–70 region in a narrow trading band in the Asian session on Wednesday. Traders continue to fear intervention by the Bank of Japan (BoJ) as the JPY weakens to a 9-month low. The major currently trades near 145.52, losing 0.02% for the day. 

According to the preliminary data of the Gross Domestic Product (GDP) figures for the second quarter (Q2) of 2023 on Tuesday, Japan’s economic growth came in at 1.5% QoQ, versus 0.8% expected and 0.7% previously. Meanwhile, the annualised GDP increased to 6.0%, compared to 3.1% estimated and 2.7% previously. Japan’s Economy Minister Shigeyuki Goto stated that he anticipated a moderate economic recovery before mentioning the need to pay attention to the danger of a global downturn and the impacts of price increases. Goto demonstrated a willingness to respond flexibly to the economy and prices as needed.

That said, the monetary policy differential between the US and Japan is the main driver of the Yen's weakening. However, the optimism that US interest rates have peaked might cap the upside in the Greenback. Furthermore, traders turn cautious amid the fear of FX intervention by the BoJ. It’s worth noting that the Japanese central bank prompted massive dollar selling in September and October last year as the Japanese Yen approached the 145 zone.

Finance Minister Shunichi Suzuki stated on Tuesday that rapid movements are "undesirable" and the government is "ready to respond appropriately," while emphasising that no particular levels are intended for intervention, per Reuters. 

Across the pond, US Retail Sales came in above expectations. The headline figure climbed by 0.7% MoM, higher than the 0.4% estimated. Sales excluding the automobile sector came in at 1%, versus the expected 0.4%. Meanwhile, the NY Empire Manufacturing Index fell to -19 from -1. On Tuesday, Minnesota’s Federal Reserve (Fed) President Neil Kashkari stated that he is pleased with the progress on inflation, but it is still too high. Kashkari noted the uncertainty regarding whether the Fed has done enough or needs to do more.

Market players will take more cues from the economic data. Later in the day, the US Building Permits, Housing Starts, and Industrial Production will be released. However, the FOMC minutes will be the key event this week. On the Japanese docket, the nation’s Trade data and annual National Consumer Price Index for July will be due on Thursday and Friday, respectively.