JP Morgan strategists warn that a break of USD/JPY above 155 could trigger concentrated short covering and accelerate yen appreciation. They estimate 16–17 trillion yen (about $102.6 billion) of yen short positions remain open and say, in theory, full covering of those positions could push USD/JPY down to the 142–146 range. Recent price action appears consistent with a still-large short position base, raising the risk of larger-than-expected yen strength.

US continuing jobless claims for week ending Aug 22: 1.779 mln (consensus 1.79 mln). Prior reading revised to 1.771 mln from 1.778 mln.

Bank of Korea data show foreign-exchange reserves climbed $14.33 billion in August to $442.28 billion from $427.95 billion at end-July, the largest monthly increase on record. The central bank said the gain was mainly driven by a surge in commercial banks’ foreign-currency deposits with the Bank of Korea and valuation and investment gains as a weaker US dollar lifted foreign-currency assets. The reserve improvement bolsters South Korea’s external liquidity buffer after the won weakened several times in 1H — at one point its weakest since 2009 — prompting authorities to warn about excessive FX volatility and seek to curb retail-driven capital outflows from overseas asset purchases.