Japan’s yen weakens after a 4.5% post-intervention rally, eroding gains despite broader USD softness ahead of US payrolls data.
The Japanese yen retreated against the US dollar on Thursday, paring back a 4.5% surge triggered by last week’s coordinated US-Japan intervention. USD/JPY climbed to within pips of 158.00 after hitting a low of 155.23 earlier in the week, despite a weaker dollar backdrop.
Analysts noted the government’s unfunded plan to cut food sales taxes and provide handouts to low-income households drew criticism from markets and opposition parties. A recent 30-year bond auction showed little investor concern, but the yen’s performance remains a key test of policy credibility.
Markets now focus on Friday’s US Nonfarm Payrolls report, with consensus expecting 80K new jobs in July, up from June’s 57K. Weak recent data has fueled doubts about the outlook, keeping pressure on the dollar.