Home›Forex›Major Pairs›USD/JPY rises above 159 as US yields rebound

USD/JPY rises above 159 as US yields rebound

The yen is pressured by elevated oil costs and Japan’s widening trade deficit, even as US Treasury yields and labor data support the dollar.

Reported · Written up by our desk · Major Pairs

USD/JPY traded above 159 on Thursday, rising on the day and clawing back much of the prior session’s losses, according to FXStreet. The currency move was driven more by a steadier US Dollar than by developments from Japan.

FXStreet said US Treasury yields bounced back after a sharp drop following the US Treasury’s decision to expand liquidity-support buybacks of longer-dated debt. Firmer labor data also helped, with weekly Initial Jobless Claims coming in below expectations and supporting the case for the Federal Reserve to hold rates next month.

The article pointed to a broadly soft Japanese Yen as the bigger drag, noting Japan imports almost all of its energy and that elevated oil prices are creating a headwind. July trade figures showed strain, with imports surging on higher energy costs and Japan running a sizeable trade deficit.

Longer term, the yen faces fiscal worries and still-low interest rates, while the near-term setup looks uneven against expectations for the Bank of Japan. FXStreet noted the BoJ is expected to raise rates in September, and cited analysts at Societe Generale warning that a durable turn lower in USD/JPY may require fresh FX intervention or a meaningful drop in oil to ease the growth pressure.

Latest closeUSD/JPY 159.31 ▼0.1%

More like this

Sources