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Japanese Yen Weakens Amid US Dollar Strength
Developing
In Short: The Japanese yen (JPY) remains under pressure following a strong rebound in the US dollar (USD) last week. USD/JPY eased below 157.00 in Asia on Monday, despite modest yen strength amid looming intervention risks.
The Japanese yen (JPY) remains under pressure following a strong rebound in the US dollar (USD) last week. USD/JPY eased below 157.00 in Asia on Monday, despite modest yen strength amid looming intervention risks.
The yen's weakness persists near recent highs, despite the Bank of Japan's (BoJ) monetary tightening. Concerns about potential intervention by Japanese authorities in the foreign exchange market are resurfacing.
Asian traders reacted negatively to a weak US ADP report, weakening the US dollar across the board and putting renewed selling pressure on the USD/JPY pair.
The persistent weakness of the Japanese currency is attracting the attention of authorities, who may consider intervention to stabilize the yen's value.
Background
The Japanese yen weakened against the US dollar on Monday after the Bank of Japan raised its short-term interest rate target.
Markets anticipate a 25bp BoJ hike to 1.25%, with focus on Governor Ueda's guidance on further interest rate normalization.
What's still developing
- Meanwhile, hawkish BoJ expectations and intervention risks continue to lend support to the Japanese Yen, rendering it negative for the major.