USD/JPY moved nervously in the Tokyo market on the afternoon of the 3rd, standing at ¥157.04 as of 17:00. Expectations of a Bank of Japan rate hike and concerns about intervention prompted yen buying, with the pair briefly falling to ¥156.36, its lowest level since 3 August.
USD/JPY moved nervously in the Tokyo foreign exchange market on the afternoon of the 3rd, with the price at ¥157.04 as of 17:00, placing the dollar approximately ¥0.33 lower than its ¥157.37 level at 15:00. The yen's strengthening trend continued against a backdrop of expectations that the Bank of Japan could accelerate the pace of rate hikes and concerns about foreign exchange intervention.
Reports citing sources familiar with the matter said the Bank of Japan was likely to raise rates by 0.25% at this month's meeting while maintaining flexibility on the pace. The dollar briefly came under pressure and recovered to around ¥157.37 after the reports emerged. There had also been expectations that the Bank of Japan would raise rates by 0.25% or more at its September meeting, but the yen's strengthening trend ultimately remained unchanged.
EUR/JPY also fluctuated sharply, standing at ¥182.23 as of 17:00. EUR/USD rose at one point to around $1.1604, but overall directional momentum was limited. The Bank of Japan's actions remained the market's central focus, and yen crosses also moved through four-figure ranges.
The reference ranges so far today were ¥156.36 to ¥158.97 for USD/JPY, 1.1584-1.1615 for EUR/USD and ¥181.58-¥184.18 for EUR/JPY.