Dollar Strength Caps USD/JPY Gains Amid Intervention Risk
The USD/JPY pair experienced broad dollar strength over Japan's extended holiday week. The pair opened near 157 and traded in a range of 156-159, with gains capped by the risk of potential Japanese intervention. According to MUFG's Teppei Ino, the pair briefly fell to a low of 156.59 on September 21 but then edged higher amid dollar strength.
The dollar continued its upward trend after the holiday on September 24, supported in part by expectations that the Federal Reserve could bring forward its next rate hike. The USD/JPY rose to a high of 159.03, but retreated below 158.50 due to caution over potential Japanese intervention and comments from Finance Minister Satsuki Katayama.