In Tokyo trading on the 8th, USD/JPY initially resisted a decline before recovering to the 154-yen level in the afternoon. The pair initially fell on expectations that yen buying would prevail, but buying of the dollar strengthened again as oil prices moved higher and US long-term yields rose.
The Nikkei Stock Average closed at ¥65,269.33, down ¥1,130 from the previous business day. USD/JPY fell from ¥154.37 to ¥152.88 during the day before recovering to the 154-yen level in the afternoon. EUR/JPY fell from ¥179.44 to ¥177.86, while EUR/USD declined from $1.1635 to $1.1609.
Economic indicators released that day included July total cash earnings in Japan's Monthly Labour Survey, up 4.7% year on year; the GDP deflator for April-June, up 2.6% year on year; and the preliminary GDP-related figure, up 1.4%. The balance of payments current account recorded a surplus of +¥2.9889 trillion in July, with the surplus widening from the previous reading.
In indicators related to economic sentiment, the current conditions index in the Economy Watchers Survey was 46.4, while the outlook index was 48.3. Among comments from officials, Finance Minister Katayama said he would not refer to a specific exchange-rate level and that Japan's policy on coordinated intervention with the United States remained unchanged. It was also suggested that the Government Pension Investment Fund's asset allocation should be reviewed as appropriate.
As an overall picture of the foreign-exchange market, expectations of tighter monetary policy by the Bank of Japan, the unwinding of yen selling, and movements in oil prices and US long-term yields were cited as possible factors behind the renewed dollar buying. Future developments are expected to be monitored with additional indicators and decisions on coordinated intervention by Japan and the United States as key considerations.