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Yen eases as FX intervention gains fade, USD/JPY nears 158

USD/JPY is back just shy of 158 after intervention earlier triggered a 4.5% yen jump, while Fed rate hike odds fell to 54% from 67% this week.

Reported · Written up by our desk · Major Pairs

The Japanese yen is trading slightly lower against the US dollar on Thursday, giving back some of the gains after an exceptional US-Japan coordinated intervention that helped yen strength by about 4.5% late last week, according to FXStreet.

USD/JPY has moved back to levels a few pips below 158.00 after hitting lows at 155.23 on Monday, even as the dollar remains broadly weak, Rabobank said in FXStreet’s roundup.

Rabobank pointed to Japan’s policy backdrop, noting the cabinet approved a plan to cut the sales tax on food for two years and that handouts for lower income households are planned, while the unfunded nature of the tax package has drawn criticism. The bank said investors may ultimately judge the credibility of the policy mix through the currency.

The yen’s support also comes amid US data uncertainty, FXStreet reported, with concerns building around soft US employment prints ahead of Friday’s Nonfarm Payrolls. It cited CME Group FedWatch, which lowered the probability of a Fed rate hike to 54% from 67% earlier in the week, after weaker employment signals including a 44K net employment growth in ADP for July and an ISM Services PMI that showed employment contracting but still indicated growth.

Latest closeUSD/JPY 157.69 ▲0.1%

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