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Japanese Yen Under Pressure Amid Intervention Fears
Confirmed
In Short: The Japanese Yen weakened as USD strengthened, raising concerns about potential intervention by Japanese authorities.
The Japanese Yen (JPY) remains under pressure following the strong rebound in the US Dollar (USD) observed last week, with USD/JPY easing back below 157.00 in Asia on Monday.
USD/JPY fell to 153.50 on Wednesday, leaving the Japanese yen close to its strongest level in almost seven months.
The persistent weakness of the Japanese currency is attracting the attention of authorities, with Treasury Secretary Scott Bessent warning about testing Japanese Yen intervention.
Bessent said he clearly understood what to expect from the Bank of Japan, particularly regarding when Japanese authorities are prepared to respond to excessive exchange-rate movements.
The surge in US bond yields, bolstered by oil-driven inflation fears, continues to weigh on the non-yielding bullion, further pressuring the Japanese Yen.
Sentiment among Japanese manufacturers improved for a second consecutive month in September, supported by resilient demand from the semiconductor and data-centre sectors.
The Japanese yen surged to a one-month high against the U.S. dollar, with the dollar falling as much as 1.5% to around ¥156.17.
The speed of the move raised questions about official intervention, though Japanese government data and market analysts did not confirm direct currency-market action on September 3.
Investors are increasingly pricing in a policy move as inflation pressures persist and the yen’s prior weakness raises import costs for Japanese households and businesses.
A higher Japanese policy rate would tend to support the yen by narrowing the gap between U.S. and Japanese interest rates.
What this adds
The report adds that the Japanese Yen's weakness is also attracting the attention of authorities, with Treasury Secretary Scott Bessent warning about potential intervention.
What's confirmed
- The Japanese Yen (JPY) remains under pressure following the strong rebound in the US Dollar (USD) observed last week, with USD/JPY easing back below 157.00 in Asia on Monday.
- USD/JPY fell to 153.50 on Wednesday, leaving the Japanese yen close to its strongest level in almost seven months.
- The persistent weakness of the Japanese currency is attracting the attention of authorities, with Treasury Secretary Scott Bessent warning about testing Japanese Yen intervention.
- Bessent said he clearly understood what to expect from the Bank of Japan, particularly regarding when Japanese authorities are prepared to respond to excessive exchange-rate movements.
- The surge in US bond yields, bolstered by oil-driven inflation fears, continues to weigh on the non-yielding bullion, further pressuring the Japanese Yen.
- Sentiment among Japanese manufacturers improved for a second consecutive month in September, supported by resilient demand from the semiconductor and data-centre sectors.
- The Japanese yen surged to a one-month high against the U.S. dollar, with the dollar falling as much as 1.5% to around ¥156.17.
- The speed of the move raised questions about official intervention, though Japanese government data and market analysts did not confirm direct currency-market action on September 3.
- Investors are increasingly pricing in a policy move as inflation pressures persist and the yen’s prior weakness raises import costs for Japanese households and businesses.
- A higher Japanese policy rate would tend to support the yen by narrowing the gap between U.S. and Japanese interest rates.
What's still developing
- The pair remains close to recent highs as the Japanese Yen (JPY) continues to weaken despite monetary tightening by the Bank of Japan (BoJ), while concerns about a potential intervention by Japanese authorities in the foreign exchange market resurface.
- The more important response must come from the BoJ, particularly through establishing a tightening cycle that extends well beyond September." "This week’s data confirming Japanese selling of U.S.
- Expectations surrounding Japanese monetary policy are also supporting the yen.
- The yen is also benefiting from the unwinding of carry trades and growing expectations of capital repatriation to Japan.