USD/JPY saw a period of significant movement on 7 September, as expectations of a narrowing Japan-U.S. interest rate differential, a hawkish outlook from the Bank of Japan and intervention concerns prompted yen selling and a reduction in carry trades.
USD/JPY fell at 04:05 (ET) on 7 September, with the current price at $155.416. The decline over the past 7 days has reached approximately 2.7%.
Expectations of a renewed hawkish policy stance from the Bank of Japan and a narrowing Japan-U.S. interest rate differential strengthened, and market views grew that a rate hike had been priced in for the next policy meeting. This intensified downward pressure on the yen.
Concerns over the risk of foreign-exchange intervention increased, prompting institutional investors to scale back carry trade positions funded in yen. In addition, expectations for a softer interest rate outlook from the Federal Reserve and falling U.S. Treasury yields also limited the U.S. dollar's relative advantage.
Technically, the MACD is showing a sell signal, the RSI is near neutral, and the Williams %R is indicating oversold conditions. Against this backdrop, USD/JPY remained near its lows.