Japanese Yen holds range in thin holiday trading amid intervention speculations
USD/JPY moves little after posting nearly 1% gains in the previous day, trading around 159.30 during the Asian hours on Tuesday. The pair moved little today, trading in tight ranges as market volumes remained thin with Japanese markets closed for the Mountain Day holiday.
The Japanese Yen stayed within a narrow range on Tuesday, trading around 159.30 during Asian hours. The currency experienced limited movement due to thin trading volumes as Japanese markets were closed for the Mountain Day holiday. Analysts noted that Japan's decision not to intervene, particularly by not boosting the US Dollar's decline after soft US jobs data, indicated a passive strategy aimed at merely slowing the Dollar's rise rather than reversing the Yen's long-term decline.
This distinction is crucial for market positioning as investors maintain heavily short positions on the Yen. With liquidity reduced, authorities may seize the opportunity presented by Japan's holiday to launch another intervention. Meanwhile, Japan's central bank, the Bank of Japan, may consider raising interest rates at its upcoming September meeting to tackle rising inflationary risks.
This move would be a swift turnaround from their previous anticipation of rate hikes every six months, signalling a potential shift in monetary policy expectations.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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