Dollar/Yen Range-Bound as Intervention Caution and Elevated Yields Engage in Tug-of-War

The dollar/yen pair is expected to remain range-bound between 158.20 and 160.80 during August 17-24 due to a tug-of-war between elevated U.S. long-term yields providing downside support and caution over potential intervention.

Elevated U.S. long-term yields have held in the upper 4% range, supporting dollar/yen, while caution over renewed intervention continues to cap upside.

Japan's preliminary April-June GDP growth at 1.1% annualized real rate was below market consensus, highlighting weak domestic demand and supporting dollar/yen downside.