USD/JPY dips to 161.68 after Japanese minister denies reports of low-rate fiscal policy, easing market concerns.
The Japanese Yen strengthened modestly, pushing USD/JPY down to 161.68 from a high of 162.18. The move followed comments from Growth Strategy Minister Minoru Kiuichi, who dismissed reports suggesting the government was encouraging low interest rates to support fiscal expansion.
Market volatility in long-end Japanese Government Bonds (JGBs) and speculation over a Bank of Japan rate hike by September added support. Leveraged funds’ short Yen positions and concerns over Japan’s multi-year investment plans also contributed to the currency’s movement.
Kiuichi later clarified that fiscal discipline remains intact, emphasizing sustainability in government policy. The yen’s gains reflect relief over reduced fiscal uncertainty, though energy price pressures persist.