Japan’s Katayama: Principles on FX established since coordinated intervention remain in effect

Japanese Finance Minister Satsuki Katayama affirmed on Thursday that the principles governing foreign exchange, established since the Japan-US coordinated intervention, remain in effect. She refrained from commenting on forex levels, noting that the USD/JPY pair was down 0.25% on the day at 157.93. The Australian dollar (AUD) weakened against the US dollar (USD), dropping toward 0.7000 in the Asian session on Thursday, following the release of the August jobs report for Australia.

The unemployment rate rose to 4.6% compared to the expected 4.5%, while the employment change exceeded estimates at 39.5K. Traders appeared concerned as the critical Trump-Xi meeting approached. The USD/JPY pair retreated from its three-week highs and maintained losses near 158.00 in the Asian session on Thursday. Increasing Japanese bond yields pushed the yen higher amid concerns over potential intervention, while the US dollar benefited from overnight gains and hawkish Federal Reserve expectations, reaching a two-month high.

Meanwhile, gold struggled below $4,300 in the Asian session on Thursday, appearing vulnerable due to a bearish fundamental outlook. The US bond yields surged to fresh multi-year highs as expectations of more Federal Reserve rate hikes grew, helping the dollar maintain its strong gains and pressuring the non-yielding gold.