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Yen at 40-year low as Japan warned against currency volatility
USD/JPY held near 163.8 while the U.S. Treasury urged Japan to keep raising rates, and Japan said it is ready to act if needed.
The yen stayed under pressure, briefly touching a 40-year low, as currency traders focused on pressure from the US Treasury on the Bank of Japan to keep raising interest rates. Forexlive said the US Treasury also flagged that excessive currency volatility is undesirable.
Japan’s finance minister Katayama confirmed that Tokyo and Washington are in close, around the clock contact and reiterated that Japan stands ready to take decisive action in FX markets if needed. The pair traded steadily around 163.8, with only slight dollar softness seen elsewhere across major currencies.
At the same time, June inflation data offered limited new direction for USD/JPY, with headline and core CPI landing in line with expectations. The core-core measure slowed to its softest pace since August 2022, which according to Forexlive gave the BOJ room to remain patient at its next meeting.
Risk sentiment weighed on Asian equities as the day’s backdrop included oil concerns tied to ongoing Middle East conflict and expectations around Opec+ supply decisions. Forexlive also noted ongoing US military strikes against Iranian targets and Iran’s rejection of a proposed ceasefire, adding to broader uncertainty for markets.
Latest closeUSD/JPY 163.84 ▲0.4%