Japanese authorities signal readiness to act on currency moves, while softer US PPI data fuels Fed rate cut bets, pressuring the dollar.
The USD/JPY pair fell to near 162.15 in Asian trading Thursday after Japan’s Finance Minister Satsuki Katayama warned of potential intervention to stabilize the yen. Katayama stated officials are monitoring markets and economic data closely, prepared to take action as needed.
US inflation data released Wednesday showed the Producer Price Index (PPI) rose 5.5% year-over-year in June, below the 6.2% consensus and down from May’s revised 6.0%. Monthly PPI declined 0.3%, defying expectations for no change. The softer print reinforced expectations the Federal Reserve may delay further rate hikes.
Markets now price a 9.6% chance of a July rate increase, down from 45% earlier in the week. Odds of a 25 basis points hike in September remain at 50%, according to CME FedWatch data.