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USD/JPY holds below 160 as Fed-hike odds fade

The move comes as the 10-year Treasury yield rose toward 4.75% and the 30-year yield topped 5.30% before pulling back, while Middle East tensions keep rate paths uncertain.

Reported · Written up by our desk · Major Pairs

USD/JPY stayed range-bound below the 160 psychological level, trading around 159.60 as the US Dollar struggled to gain traction, FXStreet reported. The pairing reflects reduced expectations for a Federal Reserve interest rate hike at the upcoming meeting.

Support for the greenback came from higher long-term US Treasury yields, with the 10-year yield climbing toward 4.75% and the 30-year yield rising above 5.30%, its highest level since 2007, before both pulled back later in US trading.

FXStreet also pointed to moderating inflation data that has led markets to scale back a September Fed hike, though elevated oil prices keep inflation risks in focus and prevent traders from fully ruling out a move later this year. Middle East developments were part of that uncertainty, with Iran-linked comments suggesting the Strait of Hormuz would remain closed until US conditions are met.

On the yen side, expectations that the Bank of Japan could raise rates as soon as September did not provide much support, FXStreet said. Traders remained cautious about the potential for another Japanese intervention if USD/JPY pushes above 160.00, with the FOMC Minutes due Wednesday and Japan CPI scheduled for Friday.

Latest closeUSD/JPY 159.31 ▼0.1%

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