USD/JPY fell 0.65% at 00:00 (ET) on 8 September and is currently around $153.33. With a narrowing US-Japan interest-rate differential and expectations of a Bank of Japan rate hike both in play, attention is focused on the Bank of Japan's response at its next policy meeting.
USD/JPY was down 0.65% at 00:00 (ET) on 8 September, with the latest level reported at around $153.328. Over the past 7 days, it has fallen 4.26%.
The decline has been attributed to the unwinding of short-yen positions and rapid repricing of the Bank of Japan's policy outlook, with hawkish remarks from the Bank of Japan supporting market pricing.
The US dollar is undergoing position adjustments ahead of the release of key US inflation data, while debate over the Federal Reserve's policy rate path continues.
While some in the market believe that a narrowing US-Japan interest-rate differential is encouraging purchases of the yen and that the yen could be revalued over the longer term, the release of new risk indicators, including the US Consumer Price Index, could create short-term volatility.