Japanese Yen pares losses after hitting a 40-year low, with markets wary of potential Tokyo FX intervention amid USD stabilization.
The USD/JPY pair rebounded to 161.25 on Friday after dropping nearly 0.9% the prior session, as traders weighed the risk of Japanese authorities stepping into currency markets. The Yen earlier touched a 40-year low, prompting speculation of intervention after Finance Minister Katayama signaled readiness to act against excessive volatility.
Japan’s government reiterated close coordination with the US on currency moves, while the US Dollar Index (DXY) stabilized near 100.80. Weaker-than-expected US Nonfarm Payrolls data had pressured the Greenback, delaying Fed rate hike bets, though inflation concerns keep policy expectations restrictive.
Markets remain on alert for intervention, with the CME FedWatch Tool showing a September rate hike probability at 53%, down from 63% before the NFP release.