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USD/JPY rebounds toward 160 as Japan yield and rate expectations rise
Markets increased pricing for a September rate hike to about 70%, helping lift USD/JPY back toward 160 after earlier trading near 155 in August.
Action Forex said the focus of the session included Japan, where the 10-year government bond yield climbed to 3% for the first time since 1996 after comments attributed to US Treasury Secretary Scott Bessent urged the Bank of Japan to raise rates more aggressively.
The shift in rate expectations coincided with broader bond yield strength, with rising oil and natural gas prices cited as raising inflation concerns. Markets were already pricing a high likelihood of a 25 basis point move to 1.25% at the September meeting, and the remarks pushed that probability higher, to around 70%.
The currency reaction stayed in focus after earlier joint intervention by Japanese and US authorities, with USD/JPY rising back toward 160 after briefly touching 155 at the start of August.
Separately, Action Forex pointed to euro area data, saying Germany’s inflation print showed HICP at 2.9% year over year in August, while core CPI was unchanged at 2.4% year over year, and that core inflation pressures remained contained.
Latest closeNat gas $2.936 ▲1.7%|USD/JPY 159.72 ▼0.2%