Elevated oil prices and hawkish Fed expectations weigh on the yen, offsetting earlier intervention effects and supporting the dollar.
The USD/JPY pair stabilizes around 159.24 after dipping to 158.92 intraday, as the yen struggles amid a stronger dollar and rising oil prices. Geopolitical tensions in the Strait of Hormuz and Iran’s demands for sanctions relief keep energy markets volatile.
Recent data showed the ADP Employment Change four-week average dropping to 8.25K from 15K, while traders await Wednesday’s US CPI report. The CME FedWatch tool now prices a 51.9% chance of a September rate hike, reinforcing dollar strength.
Japan’s reliance on imported energy leaves the yen vulnerable to oil price spikes, while fading intervention support and Bank of Japan hints at further rate adjustments add pressure.