USD/JPY fell sharply into the mid-¥155 range temporarily in the New York market. The view that rate-hike expectations had receded following remarks by Fed Governor Waller reportedly gained ground.
In New York foreign exchange trading, USD/JPY accelerated its decline from the previous day and plunged temporarily into the mid-¥155 range. The pair fell clearly below its 200-day moving average, and the unwinding of long-dollar positions and stop-loss triggers became prominent. The gradual yen depreciation trend that had continued for roughly the past month was reported to have shifted.
Following remarks by Fed Governor Waller, the view was reportedly expressed that this month's FOMC decision would depend on the August inflation data, along with the view that underlying inflation was not as strong as the core index. The probability of a September rate hike was consequently reported to have declined in short-term markets.
Reports said that expectations of a BOJ rate hike and speculation about a review of GPIF's asset allocation had acted as yen-positive factors. Information was also reported that the BOJ had begun adjusting toward raising its policy rate by 0.25 percentage points at this month's meeting. This was said to have the potential to affect developments in the domestic bond market as well.
EUR/USD rose at times to around 1.1640, with market positioning reportedly shifting against a backdrop of European factors and the outlook for the US employment report. Sterling also fell sharply against the yen at times, and the effects of the US-Japan interest-rate differential and oil-price movements were said to be continuing.