Dollar Yields to Pressure as Yen Intervention Takes Center Stage

The US Dollar (USD) has partially recovered from its sharp decline against the Japanese Yen (JPY), but remains 0.5% higher at around 160.30 during the European trading session on Friday.

The USD/JPY pair's positive performance in the opening session came after a significant drop the previous day, as the US Dollar rebounded from weakness amid ambiguity over the Federal Reserve's (Fed) monetary policy outlook and Japan's intervention to support the Japanese Yen.

Commerzbank's analysts note that 'the stage was set' for official action, with yesterday's intervention in the foreign exchange market by Japan's Ministry of Finance 'clearly' demonstrating that the government is worried about the Japanese Yen being 'too weak.'