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Yen gains on intervention warning as USD/JPY slips near 162

Tokyo’s finance minister reiterated Japan is ready to act, while softer US inflation expectations cut the odds of a July Fed hike to 9.6%.

Reported · Written up by our desk · Major Pairs

The Japanese yen strengthened against the US dollar in Asian trading, with USD/JPY slipping to around 162.15, after Japanese authorities issued verbal warnings that they could take action in currency markets.

FXStreet reported that Japan’s Finance Minister Satsuki Katayama said officials are ready to take appropriate steps anytime and will monitor market conditions and economic data to support fiscal sustainability. Traders also remain alert for a potential follow up from officials.

The move was reinforced by cooling US inflation expectations following data released by the US Bureau of Labor Statistics, which showed June producer prices rose 5.5% year over year, down from 6.0% in May. On the month, the PPI fell 0.3%, and the report said the outcome came in below market expectations.

FXStreet added that those figures reduced the probability of a July rate hike to 9.6%, down from about 45% earlier in the week, according to CME FedWatch. The article noted markets still see roughly even odds for at least a 25 basis point hike in September.

Latest closeUSD/JPY 162.11 ▼0.2%

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