Japanese Yen: Intervention risks shape Dollar pullback – MUFG

MUFG’s Teppei Ino reviews recent USD/JPY price action, noting the pair opened near 161.78 and briefly tested the 162.84 area before reversing. The report highlights Dollar weakness after comments from Fed Chair Kevin Warsh and a softer US employment report. Despite broad Dollar selling against G10 currencies, the Yen remained relatively weak within this environment.

Dollar slide and intervention concerns

"The USD/JPY opened the week at 161.78. The pair edged higher from the start of the week, reaching the 162 range around the Tokyo fixing on 30 June."

"The pace then picked up somewhat, and the pair rose to this week's high of 162.84 on 1 July. However, the dollar turned lower during US trading hours that day after Fed Chair Kevin Warsh said inflation risks had receded, pushing the USD/JPY below 162.50."

"The topside remained heavy on 2 July amid lingering concerns about intervention by the Japanese authorities, and the pair fell sharply around the European open."

"The decline accelerated after the USD/JPY broke below 162, with the pair then slipping below 161. The USD/JPY temporarily rebounded to around 161.50, but broad dollar weakness after the US employment report came in below market expectations pushed it down further to a low of 160.64."

"The pair quickly recovered to around 161, and at the time of writing on 3 July was edging higher in the low 161 range."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)