USD/JPY fell to the low ¥157s in early New York trading. Selling into the rebound in crude oil prices and lower U.S. Treasury yields provided the backdrop, prompting yen short-covering.
The foreign exchange market saw stronger dollar weakness and yen strength today, with USD/JPY falling to the low ¥157s. Selling into the rebound in crude oil prices and lower U.S. Treasury yields curbed the dollar's upward momentum, while yen strength pushed USD/JPY lower. The yen rose sharply against other G10 currencies as the Japanese market reopened.
The move was reportedly driven by remarks from Prime Minister Takaichi and Finance Minister Katayama. Prime Minister Takaichi said that the U.S. side had told her that yen weakness was making trade difficult for the United States, and was reported to have said in general terms that the yen's undervaluation was a problem. Finance Minister Katayama indicated heightened vigilance over possible intervention and a stronger focus on Japan-U.S. coordination, and stated that coordination with Treasury Secretary Bessent would continue.
Market participants say that while USD/JPY is moving with ¥160 in sight, buy-on-dips orders are lined up below the market amid uncertainty over the Japan-U.S. interest-rate differential and the pace of Bank of Japan rate hikes. Some analysts also say that the possibility of stronger Japan-U.S. coordination in response to President Trump's concerns about yen weakness could curb yen selling.
As for options expiries in the New York market, no expiries near current levels have been observed so far. Developments in remarks from Japan and the United States, as well as interest rates and policy, are expected to continue influencing market trends.