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USD/JPY eases as dollar slips ahead of FOMC minutes

USD/JPY was last around 159.10, down 0.32%, while markets await the July FOMC Minutes for guidance on the Fed’s policy path.

Reported · Written up by our desk · Major Pairs

FXStreet reports that USD/JPY edged lower on Wednesday as the US Dollar lost momentum and retreated toward the June lows. The pair was trading around 159.10, down 0.32% on the day, while the Japanese yen outperformed most major peers.

The dollar’s move came as US Federal Reserve rate expectations recently repriced in a more dovish direction, reducing the chance of a September rate hike. At the same time, persistent inflation concerns, including those tied to higher energy costs, kept expectations for a future hike alive.

FXStreet also points to geopolitical and energy factors, noting that heightened restrictions on shipping through the Strait of Hormuz have supported oil prices and raised the risk of faster inflation, which could eventually push the Fed to raise rates. Traders are looking to the release of the FOMC Minutes from the July meeting, due at 18:00 GMT, for fresh policy clues.

On the yen side, FXStreet says the currency remains structurally weak despite intraday gains, citing Japan’s fiscal concerns, higher oil prices, and wide interest rate differentials. The report adds that MUFG sees markets pricing further Bank of Japan tightening over the next 12 months, but warns weaker-than-expected Q2 GDP growth could limit how aggressively the BoJ can tighten.

Latest closeUSD/JPY 159.31 ▼0.1%

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