USD/JPY falls toward its first weekly loss in eight weeks after Japan signals potential unsignaled currency intervention.
The Japanese Yen (JPY) recovered from four-decade lows Thursday, driven by a weaker US Dollar (USD) after softer June Nonfarm Payrolls data. Fear of unsignaled intervention by Tokyo authorities also pressured USD/JPY, pushing it toward its first weekly decline in eight weeks.
Traders had previously dismissed warnings from Finance Minister Satsuki Katayama, assuming Japan would telegraph any intervention. However, reports suggest Tokyo may now act without advance notice, removing the market’s early-warning system. Thin liquidity ahead of the US Independence Day holiday could amplify any intervention’s impact.
Despite the Bank of Japan (BoJ) raising rates to 1.00%, a 275 basis-point gap with the Federal Reserve keeps the carry trade attractive, limiting the Yen’s gains.