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USD/JPY holds near 159 as oil risk and rate bets pressure the yen
FXStreet cited CME FedWatch showing a 51.9% chance of a September rate hike, while Japan’s heavy reliance on imported energy keeps near-term yen pressure linked to higher oil prices.
USD/JPY traded around 159.24 after an intraday low of 158.92, as the Japanese yen struggled to find footing amid a firmer US dollar and elevated oil prices, according to FXStreet.
The outlet linked the yen’s weakness to growing inflation concerns from higher oil, alongside expectations that the Federal Reserve may need to raise rates. CME FedWatch, cited by FXStreet, indicated a 51.9% chance of a September rate hike, while the US Dollar Index (DXY) was last around 99.85.
FXStreet also pointed to uncertainty around plans to reopen the Strait of Hormuz. It noted that Iran and Oman talks have advanced, and that Iran has outlined US demands including lifting sanctions and releasing frozen Iranian assets, ending military threats, and removing the naval blockade.
On the data front, FXStreet said ADP Employment Change on a four-week average fell to 8.25K from a downwardly revised 11K, with traders awaiting Wednesday’s US CPI. The piece added that Rabobank flagged interest rate differentials as another factor weighing on the currency, even as the Bank of Japan begins to signal a willingness to address them.
Latest closeUSD/JPY 159.27 ▲0.5%|Dollar index 99.81 ▲0.2%