Reports of government measures to increase domestic investments by pension funds strengthen the Yen, pressuring USD/JPY to 161.50.
The Japanese Yen rose against the US Dollar on Friday, with USD/JPY falling to around 161.50 in early European trading. The move follows reports that Japan’s government is urging pension funds, including the Government Pension Investment Fund, to increase holdings of domestic financial assets.
Finance Minister Satsuki Katayama indicated the government is pursuing measures to support greater investment in Japanese assets, which analysts say could provide more sustained support for the currency than intervention. Meanwhile, traders reduced bets on a US Federal Reserve rate hike this year after New York Fed President John Williams downplayed energy price risks.
Fed rate hike expectations for July dropped to 24.6%, while September odds fell to 62.3%, according to the CME FedWatch tool.