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Yen slips despite faster-than-forecast Japanese pay growth

USD/JPY is around 158.00, near the level it traded at before the release that briefly pushed it to its highest since Sep. 25.

Reported · Written up by our desk · Major Pairs

Japanese pay growth came in above forecast for August, but the yen weakened anyway, leaving USD/JPY trading near 158.00, a level it had returned to after earlier moves tied to the release, according to FXStreet.

The data showed nominal pay rising 3.8% year over year versus a 3.7% forecast, while real wage growth slowed for a second month to 1.5%. The report also revised July pay growth down to 4.3% from 4.7%.

FXStreet notes that faster pay than prices is typically the kind of backdrop that can support expectations for further Bank of Japan hikes, but the slowing trend did not move expectations for the next action forward in the near term.

The brief also points to broader rate and budget dynamics, citing a 10-year Japanese government bond yield holding near 3.11% on Wednesday and noting that yields rising on budget worries rather than rate expectations can weaken a currency instead of strengthening it.

Latest closeUSD/JPY 157.94 ▲0.1%

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