USD/JPY was down 0.53% as of 02:05 (ET) on 9 September, with the current value at $153.131. It has fallen 3.50% over the past 7 days.
The decline in the US dollar against the yen has been attributed to the market rapidly pricing in tighter monetary policy from the Bank of Japan and the unwinding of yen carry trades. Hawkish comments from central bank officials and solid domestic data are seen as having raised expectations for further BoJ rate hikes.
Technically, the decline is said to have gained momentum after USD/JPY broke below key structural support near 155.00, triggering stop-loss orders and widespread liquidation of long-dollar positions. There has also been an increase in downside options amid shifts in macro positioning.
On the US side, market participants have adopted a cautious stance ahead of data releases relevant to the Federal Reserve’s interest-rate outlook. While US economic indicators point to a solid labor market, the narrowing US-Japan interest-rate differential continues to weigh on USD/JPY.
Rising geopolitical risks and higher energy prices are also supporting risk-off moves and encouraging inflows into the Japanese yen.