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USD/JPY steadies near 153.50 after Treasury bond buyback update
The Treasury said it may buy back up to $6 billion of longer dated debt on Thursday, pushing the 10 year yield toward 4.85% and lifting the US Dollar Index back to about 98.8.
USD/JPY held below the 153.00 area and was trading around 153.50, with selling pressure on the Japanese yen lacking follow through as the US dollar recovered after a Treasury announcement about larger bond buybacks, according to FXStreet.
The US Treasury said it could buy back up to $6 billion of longer dated debt on Thursday, above a previously indicated minimum of $4 billion per operation. US Treasury yields moved higher after the announcement, with the benchmark 10 year yield around 4.85%, its highest level since November 2023, while the US Dollar Index, tracked against six major currencies, rebounded to roughly 98.8 from 98.6.
Despite the dollar pickup, near term conditions still favored the yen, FXStreet said, citing expectations of faster Bank of Japan tightening and that a rate hike was fully priced for the September 17 to 18 meeting. The article added that unwinding of yen funded carry trades and repatriation of overseas funds were supporting yen strength without fresh intervention.
Attention is shifting to US data, with traders looking to Thursday’s Producer Price Index and Friday’s Consumer Price Index ahead of the Federal Reserve’s September 15 to 16 meeting. FXStreet cited the CME FedWatch Tool showing markets pricing about a 60% chance of a 25 basis point hike, noting that upside inflation could help USD/JPY recover while softer data could weigh on the pair.
Latest closeUSD/JPY 153.54 ▼0.2%|Dollar index 98.84 ▼0.3%