USD/JPY plunged from the ¥160 range into the ¥159 range, with yen strength weighing on the pair in early New York trading. Comments from BOJ officials and market expectations for the yen at the G20 heightened caution in the market.
In today's foreign exchange market, USD/JPY rose as high as ¥160.40 before falling to around ¥159.45 and slipping into the ¥159 range. The dollar was generally stronger overall, but yen buying driven by expectations surrounding the BOJ weighed on the pair.
Comments from Takata (高田), a BOJ Policy Board member, were reported, with Takata explaining that the size of a rate hike had not been predetermined. This heightened market caution over the future pace of rate hikes.
Governor Ueda (植田) also suggested at the G20 that the BOJ could raise interest rates, indicating that policy decisions would place emphasis on upside risks to prices. US Treasury Secretary Scott Bessent (ベッセント) also suggested that the BOJ needed to respond to developments in the yen exchange rate.
In short-term money markets, pricing of a September rate hike has strengthened, but differences of opinion within the BOJ have also prompted caution over expectations of overly aggressive rate hikes. Technically, the 100-day moving average is seen as resistance on the upside, while the 21-day moving average is viewed as near-term support.