- The Japanese Yen (JPY) is falling after jumping 4% in 3 days
- US Treasury Secretary dismissed speculation of joint intervention
- The US Dollar (USD) bounces from a 4-year low
- Fed rate decision is up next
The US dollar Japanese yen (USD/JPY) exchange rate is rising, snapping a three day lossing steak. The pair fell 1.28% in the previous session, settling on Tuesday at 152.20. On Wednesday at 17:00 UTC, USD/JPY trades +0.88% at 153.59 and traded in a range of 152.28 to 153.79.
The Japanese yen is sliding from a three-month high after the Trump administration dismissed speculation about a joint foreign-exchange intervention with Tokyo to strengthen the yen.
Speculation that Japanese authorities are in contact with the US to stem the slide in the end intensified on Friday after the New York Federal Reserve conducted a rate check on the US dollar yen. This is often considered a warning sign for a coordinated intervention.
The market remains cautious, surrounding the risk of intervention from Tokyo. The Bank of Japan data suggests the authorities have not officially stepped in to support the market so far
The yen had weakened sharply this year after Prime Minister Takaichi called a snap election in order to strengthen her mandate and ramp up fiscal spending. Long-dated Japanese bond yields had hit record highs.
The U.S. dollar is rising across the board. The US dollar index, which measures the USD against a basket of currencies, is falling 0.32% on Wednesday to 96.53, after four days of losses.
The US dollar is rebounding from a four-year low after comments from Treasury Secretary Scott Bessent calmed concerns that the US is adopting a weaker-dollar strategy.
Scott Bessent said the US has a strong-dollar policy while denying that Washington was intervening in currency markets to support the Japanese yen.
This helped to boost the US dollar, which had fallen to a 4-year low yesterday when Trump said that the value of the dollar was great when asked if he thought it had depreciated too much.
Attention now turns to the Federal Reserve, which is expected to leave rates at 3.75%. The main focus will be on Federal Reserve Chair Jerome Powell’s speech.