The Japanese Yen (JPY) edges up against the US Dollar (USD) on Friday, but the USD/JPY pair remains above 159.90 at the time of writing, unable to put a significant distance from the 160.00 level, considered the limit of tolerable JPY weakness for Japanese authorities.
Japanese Finance Minister Satsuki Katayama reiterated on Friday that the government is ready to respond with “decisive action” against excessive Yen volatility, which provided a mild boost to the Yen, yet not enough to trigger any significant recovery
Macroeconomic data from Japan released earlier on Friday was mixed. Labour Cash Earnings growth accelerated to a 3.5% yearly pace in April, beating expectations of a 3.2% increase, after March’s 3.1% advance. Household Spending, on the other hand, fell 0.5%, though it is unlikely to deter the Bank of Japan (BoJ) from hiking interest rates at its June 16 meeting.
BoJ tightening expectations, however, are failing to offset the US Dollar strength. The Greenback has been appreciating against most major currencies this week, as rising tensions in the Middle East have dampened hopes of a swift end to the US-Iran war, boosting demand for safe-haven assets. On Friday, traders remain reluctant to bet against the US Dollar ahead of the release of May’s US Nonfarm Payrolls report.