Traders await US inflation data and Fed commentary as the yen stabilizes near multi-decade highs against the dollar.
The USD/JPY pair consolidates near 162.50 in Asian trading, retreating slightly from a four-decade peak reached earlier this month. Market participants remain cautious amid speculation of potential Japanese intervention to support the yen, which has weakened sharply against the dollar.
Japan’s Finance Minister indicated a possible review of the Government Pension Investment Fund’s asset allocation if market conditions shift significantly. Meanwhile, the dollar’s rally pauses as investors await US consumer inflation figures and Federal Reserve remarks, which could influence monetary policy expectations.
Geopolitical tensions, including US-Iran clashes and attacks on shipping in the Strait of Hormuz, add to demand for the safe-haven dollar. However, the yen’s near-term outlook remains tied to US data and Fed signals.