Japanese yen rose further after Japan’s Yoshimasa Hayashi indicated that authorities would respond appropriately to excessive currency volatility.
On Tuesday, the Japanese yen (JPY) extended its advances for the second straight day. According to Reuters, the USDJPY pair remains within touching distance of the 160.00 level, which recently prompted Japanese authorities to spend billions of dollars in Yen-buying intervention.
The JPY rose when the Japanese government spent billions of dollars on a Yen-buying intervention.
Japan’s Corporate Service Price Index (YoY) increased 2.5% in May, slower than the 2.7% increase in April. Japanese yen Investors now look forward to This week’s domestic economic releases include retail sales, May unemployment data, and Tokyo’s June inflation figures.
On the USD front, the revised US GDP for the first quarter (Q1) is scheduled to be issued on Thursday, followed by the Personal Consumption Expenditure (PCE) Price Index on Friday.
Daily Market Movers: Japanese Yen Extends Gains Due to Intervention Threat.
According to the CME FedWatch Tool, investors expect the Fed to decrease interest rates in September at a rate of 67.7%, up from 61.5% the previous week.
According to Reuters, Japanese Chief Cabinet Secretary Yoshimasa Hayashi said on Tuesday that authorities would respond appropriately to excessive currency volatility. This fresh warning comes as the Japanese yen approaches the key. 160 per US dollar level.
According to UOB Group experts, as long as the Japanese yen holds above 159.30, it has the potential to advance beyond 160.00 and approach another resistance level at 160.25.
Japanese officials discussed raising interest rates in the short term.
On Tuesday, the Japanese yen (JPY) extended its advances for the second straight day. Masato Kanda, Japan’s top currency diplomat, indicated on Monday that he would take appropriate action if there were excessive swings in the foreign exchange market. Kanda warned against the detrimental economic consequences of such moves and reiterated his willingness to intervene around the clock if necessary, according to Reuters.
Minutes from the Bank of Japan’s most recent meeting were released on Monday, revealing that Japanese officials discussed raising interest rates in the short term. According to Reuters, one member called for an increase “without too much delay” to assist bring prices back down.
Strong US business activity data comes from Friday lowered expectations for Federal Reserve (Fed) interest rate decreases. The US Composite PMI topped expectations in June, climbing to 54.6 from 54.5 in May. This statistic represented the greatest level since April 2022. The manufacturing PMI rose to 51.7 from 51.3, beating the expectation of 51.0. Similarly, the Services PMI improved to 55.1 from 54.8 in May, exceeding the consensus estimate of 53.7.
According to Reuters, Bank of Japan Deputy Governor Shinichi Uchida stated on Friday that the central bank will “adjust the degree of monetary support” if the economy and prices meet its projections. This demonstrates the bank’s willingness to boost interest rates further.
Japan reaffirmed its goal on Friday to attain a primary budget surplus of the following fiscal year. This move underscores fears that quitting the ultra-low interest rate environment could increase the government’s debt load, according to Reuters.
