USD/JPY Extends Gains Amid US Treasury-Japan Intervention Risks
Traders are on high alert for currency intervention as US Treasury Secretary Scott Bessent and Japan's Finance Minister Satsuki Katayama reaffirmed their intention to strengthen cooperation to address Japanese Yen weakness.
Katayama stated that she believes undervalued JPY is problematic, while agreeing with Bessent on beefing up cooperation. Officials will maintain close communications with US Treasury to ensure orderly foreign exchange markets.
Japan's top currency diplomat Atsushi Mimura emphasized the 'very clear' message from Tokyo and Washington about their concerns over JPY weakness.
Marc Chandler, chief market strategist at Bannockburn Forex, noted that the dollar-yen is driven by rising US interest rates. He thinks there's a tug of war between verbal intervention by Japanese officials claiming US support and rising US yields.