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03/07/24
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JPY Inches Down Ahead of FOMC Minutes
On Tuesday, the Japanese yen continued to lose ground, and USD/JPY traded at about 161.66, up 0.16% for the day in the North American session.
There are no events for Japan on the data calendar today. The US ADP employment report was released earlier and the FOMC minutes and ISM Services PMI will be published later in the day.
Japanese officials must be worried about the Japanese yen, which is battling to find its footing. The yen has recorded only 2 winning weekly sessions versus the US dollar since March 11 and has dropped 8.5% during that time.
Japan has warned that it was worried about the yen’s sharp decline and intervened in currency markets at the end of April and in early May, at which time it sold about $61B and bought yen.
Although the interventions boosted the yen briefly, it resumed its downswing quickly and has dropped to the lowest levels in 38 years.
The US/Japan rate differential is massive and with the U.S. Fed reluctant to reduce rates and the BoJ hesitant to hike, it’s difficult to see the yen improving. The Fed won’t cut rates before Sept. at the earliest and the BoJ hasn’t indicated that it is planning to hike rates at its meeting on July 31.
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