UOB Global Economics & Markets Research notes that the US Dollar extended gains after the Fed’s hawkish hold, pushing USD/JPY sharply higher to 161.37. The pair is now trading near levels that previously triggered Japanese authorities’ intervention. The report highlights that markets are closely watching for potential yen-support operations as higher US yields and a stronger Dollar continue to pressure the Japanese Yen.

Yen pressured near prior intervention zone

"The US dollar extended gains on Thu to its highest in more than a year after a hawkish hold from the Fed triggered bets on rate hikes."

"USD/JPY rose sharply and closed at 161.37 (+0.46%). Markets are reportedly on watch for yen intervention after the Fed’s hawkish stance triggered a drop in the currency to levels that have previously prompted Japan’s finance ministry to step in."

"Risk sentiment improved modestly on Thu as markets continued to digest the Fed’s hawkish tilt alongside resilient US data. Firm labour and spending signals reinforced the higher-for-longer narrative, keeping front-end yields elevated and the US dollar supported."

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