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Yen strengthens as intervention rumors swirl, USD/JPY slips

The Bank of Japan held its policy rate at 1.0% while keeping the door open to another September hike, even as the U.S. Federal Reserve left rates unchanged.

Reported · Written up by our desk · Major Pairs

The yen strengthened sharply at the end of the week amid reports that Japanese authorities may be considering currency intervention, with speculation that the United States could have supported the move, according to Action Forex.

In monetary policy decisions, the Bank of Japan kept its interest rate at 1.0% as expected and said the economy is improving, while risks to inflation remain. The message kept expectations for a potential rate hike in September alive.

The Federal Reserve also left interest rates unchanged in a 9-3 vote, saying inflation is still too high and that additional rate hikes remain possible if needed. The Bank of England likewise held rates steady while monitoring inflation and economic growth.

The report also pointed to mostly weaker U.S. data, with Durable Goods Orders, Consumer Confidence, and GDP growth all coming in below forecasts, adding to concerns that the economy is slowing. In Japan, the Tokyo consumer price index rose 1.9% year on year in July, slightly above the 1.8% expected.

Latest closeUSD/JPY 157.40 ▼1.7%

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