USD/JPY rises to near 149.00 ahead of US JOLTS Job Openings data
The USD/JPY pair moves higher to near 149.00 during the European session on Wednesday. The pair moved higher as the Japanese Yen (JPY) underperforms its peers, following a sharp increase in Japan’s long-term bond yields.
  • USD/JPY gains to near 149.00 as surging yields on JGBs weigh on the Japanese Yen.
  • Investors await key US JOLTS Job Openings data for July.
  • This week, the US NFP data will be key trigger for the US Dollar.

The USD/JPY pair moves higher to near 149.00 during the European session on Wednesday. The pair moved higher as the Japanese Yen (JPY) underperforms its peers, following a sharp increase in Japan’s long-term bond yields.

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the Australian Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD -0.01% -0.08% 0.24% 0.15% -0.12% 0.11% 0.00%
EUR 0.01% -0.07% 0.26% 0.14% -0.25% 0.11% 0.00%
GBP 0.08% 0.07% 0.30% 0.23% -0.17% 0.19% 0.09%
JPY -0.24% -0.26% -0.30% -0.11% -0.46% -0.23% -0.23%
CAD -0.15% -0.14% -0.23% 0.11% -0.35% -0.04% -0.14%
AUD 0.12% 0.25% 0.17% 0.46% 0.35% 0.20% 0.25%
NZD -0.11% -0.11% -0.19% 0.23% 0.04% -0.20% -0.10%
CHF -0.00% -0.01% -0.09% 0.23% 0.14% -0.25% 0.10%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

30-year Japan Government Bond (JGB) yields have surged to historic highs near 3.29%. Investors have dumped JGBs significantly amid concerns over government debt.

Meanwhile, the US Dollar (USD) demonstrates a volatile performance as risk-off market sentiment has started fizzling out. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, turns upside down after facing selling pressure near 98.60.

Earlier in the day, the Greenback advanced as its safe-haven demand increased, following a significant sell-off in bonds globally.

Meanwhile, investors await the United States (US) JOLTS Job Openings data for July, which will be published at 14:00 GMT.

Investors will pay close attention to the US job openings data to get cues about the current status of labor demand. US employers are expected to have posted fresh 7.4 million jobs, almost in line with the prior reading of 7.44 million.

This week, the major trigger for the US Dollar will be Nonfarm Payrolls (NFP) data for August, which will be released on Friday. The NFP data will significantly influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook.

 

US Dollar FAQs

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.


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