Tokyo Yen Range Hinges on US Rate Hike Bets

The yen traded in a narrow range against the dollar on the Tokyo foreign exchange market on the 29th, hovering around the lower 157 level. As of 5 p.m., the dollar-yen pair stood at 157.37-39, marking a 15-sen decline and dollar gain from the previous day.

The expectations that the U.S. Federal Reserve will proceed with additional rate hikes to address inflation concerns drove yen-selling and dollar-buying pressure in the market. Market participants focused on the widening U.S.-Japan interest rate differential.

Wariness over potential currency intervention by the Japanese government and the Bank of Japan remains entrenched in the market, despite some subdued movement around the 157.40 level early in the day. The EUR/JPY pair saw a slight appreciation against the euro, trading at 178.61-65 as of 5 p.m.