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Yen strengthens as USD/JPY falls below 162 on intervention fears

USD/JPY weakened for a second straight day, helped by follow through dollar selling after less hawkish Fed minutes.

Reported · Written up by our desk · Major Pairs

The Japanese yen firmed against the US dollar, with USD/JPY sliding below 162.00 during the Asian session. FXStreet said the move reflected heavy supply in the pair and heightened expectations that Japan could intervene to support the yen.

The dollar also faced additional pressure from follow through USD selling, while the USD Index hit a fresh weekly low after less hawkish FOMC minutes. The minutes showed policymakers divided on the direction of interest rates, even as traders priced roughly a 65.0% chance of a September Fed rate increase.

Geopolitical risks remained a counterweight for the safe haven dollar, FXStreet noted. The outlet cited new US strikes against Iran and Iran’s response, alongside uncertainty tied to energy supply disruptions in the Strait of Hormuz.

FXStreet added that Japan depends on the Middle East for more than 90.0% of its crude oil imports, and that borrowing costs in Japan are lower than in other Western economies including the US. That spread may limit aggressive bullish bets on the yen, leaving traders cautious on whether USD/JPY has topped out.

Latest closeWTI crude $71.84 ▼2.3%|USD/JPY 162.35 ▼0.0%

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