USD/JPY HOLDS ABOVE 157 AS YEN WEAKNESS KEEPS INTERVENTION RISKS IN FOCUS
USD/JPY extended its gains above 157.00, trading nearly 3% above the early-September lows as the Japanese Yen remained under pressure. The pair has been supported by a more hawkish Federal Reserve outlook following its latest rate decision.
Futures markets are pricing around a 53% probability of a 25-basis-point Fed rate increase in October and around a 90% probability of at least one further increase before year-end, according to the FedWatch Tool cited in the source.
The Bank of Japan raised its policy rate by 25 basis points to 1.25%, while Governor Ueda indicated that further rate increases remain possible depending on economic growth and consumer prices. However, two dissenting votes have raised questions around the pace of further policy tightening.
Market attention has also returned to reports of a BoJ rate check, which briefly pushed USD/JPY below 157.00. According to ING, if confirmed, the move could indicate that Japanese authorities are monitoring the pace of currency movements rather than focusing on a specific exchange-rate level.
From a market perspective, the divergence between the Fed’s relatively hawkish stance and the BoJ’s more gradual policy approach remains an important factor for USD/JPY. Upcoming US and Japanese PMI data may provide further insight into economic conditions and future policy expectations.
For market participants, the key factors remain the 157.00 level, Fed rate expectations, BoJ policy signals, Japanese official monitoring and upcoming PMI data, which may provide further context for the near-term direction of USD/JPY.
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