Dollar-Yen Pairs Rebound to 158 Range Amid US Rate Hike Expectations

The dollar-yen pair showed resilience in Tokyo's foreign exchange market on January 24th, the first trading day after Japan's extended holiday weekend. The pair traded at a low of around 158 yen in the morning session and remained stable despite temporary yen buying triggered by the Japanese government's verbal intervention to curb yen weakness.

Market participants focused on widening U.S.-Japan interest rate differentials amid growing expectations of U.S. rate hikes, leading to dollar-buying and yen-selling. As a result, the pair returned to around 158 yen levels in the afternoon session.

The euro traded at 179.83-179.84 yen, down 1.04 yen against the Japanese currency. Persistent wariness over potential currency intervention by the Japanese government and the Bank of Japan limited the yen's downside.