The US dollar (USD/JPY) pair fluctuated and fell during Asian trading on Thursday, dropping to around 162. The previously strengthening dollar temporarily lost its upward momentum, while the Japanese government's renewed signals of potential intervention in the foreign exchange market pushed the yen to a temporary rebound. Japanese Finance Minister Satsuki Katayama stated that the government is prepared to take appropriate action as necessary, depending on market conditions, to maintain exchange rate stability. She pointed out that relevant departments will continue to monitor foreign exchange market trends and economic data changes, and will take corresponding measures while considering fiscal sustainability. The Japanese government's renewed emphasis on verbal intervention has increased market expectations for actual intervention in the foreign exchange market. As the USD/JPY pair had previously approached its recent highs, the market remained highly vigilant regarding potential further action from the Japanese government. Some investors opted to reduce their long USD positions, providing some support for the yen. On the other hand, the latest US inflation data continued to weaken the dollar's performance. Data from the US Bureau of Labor Statistics showed that the US Producer Price Index (PPI) rose 5.5% year-on-year in June, lower than the revised 6.0% in May and also lower than the market expectation of 6.2% ; month-on-month, it fell -0.3% , significantly weaker than the previous value of 0.6% growth. The previously released Consumer Price Index (CPI) also fell short of market expectations, further indicating that US inflationary pressures are easing. These two consecutive cooling inflation data points further reduced the market's expectations for a short-term Fed rate hike, thus putting some pressure on the dollar. Market data shows that the probability of a Fed rate hike at its July meeting has fallen to about 9.6%, a significant drop from the approximately 45% expectation at the beginning of the week. However, market expectations for a 25 basis point rate hike in September remain relatively balanced, indicating that investors have not completely ruled out the possibility of further policy tightening. Although expectations for the Federal Reserve's short-term policy have cooled somewhat, the overall decline in the US dollar remains somewhat limited. On the one hand, the US economy as a whole continues to show some resilience; on the other hand, the ongoing tensions in the Middle East are pushing up international energy prices, which may bring renewed inflationary pressures and extend the period for the Federal Reserve to maintain its high-interest-rate policy. The market focus has now shifted to the upcoming US June retail sales data. Retail sales are considered an important indicator of US consumer demand. If the data continues to be strong, it will help alleviate market concerns about a US economic slowdown and may boost the dollar's performance again; conversely, if the data is weak, it may further strengthen market expectations that the Federal Reserve will maintain its current interest rates, putting continued pressure on the USD/JPY exchange rate. In addition, the Bank of Japan's future policy moves will also continue to affect the exchange rate. If Japanese economic data continues to improve, market expectations for further tightening of monetary policy by the Bank of Japan may rise, thus providing more support for the yen. From a daily chart perspective, the USD/JPY exchange rate has pulled back after approaching its recent high, but it still maintains an overall medium- to long-term upward trend. The MACD indicator is running at a high level, but the red bars have narrowed, indicating that the bullish momentum has weakened slightly, and there is a need for short-term technical consolidation. The current level around 162.00 forms the first support. A break below this level could see the exchange rate fall further to around 160.80. On the upside, watch for resistance around 163.00 and 164.00. A retest of 163.00 could see the bulls continue to challenge the year's high. Looking at the 4-hour chart, the exchange rate has entered a high-level consolidation phase. Short-term moving averages are gradually flattening, and the RSI indicator has fallen from overbought territory, indicating a weakening of market momentum. If US retail sales data is stronger than expected, USD/JPY may retest the resistance around 163.00; if the data is weaker than expected, and Japanese officials continue to signal intervention, the exchange rate may further test the support zone between 161.50 and 160.80. Editor's Summary: The short-term pullback in USD/JPY was mainly due to the combined effects of expectations of increased foreign exchange market intervention by the Japanese government and cooling US inflation data. Market expectations for a further rate hike by the Federal Reserve in July have significantly decreased, putting pressure on the dollar. However, as the market still anticipates the possibility of further tightening by the Fed this year, coupled with the inflationary risks from rising global energy prices, the dollar still has some overall support. Future exchange rate movements will mainly depend on the performance of US retail sales and other economic data, changes in Fed policy expectations, and whether the Japanese government takes actual foreign exchange market intervention measures. In the short term, USD/JPY is expected to maintain a high-level consolidation pattern, and investors should pay close attention to the breakout of the 162.00 support and 163.00 resistance areas.