USD/JPY Gives Back Half of Record Intervention Gains

The USD/JPY pair reached its strongest level since Tokyo and Washington intervened together at the end of July, but has since given back half of the record intervention's gains. The Dollar traded near 159.50 against the Yen on Tuesday after a session high just short of 160.00.

The Japanese government spent close to 14 trillion Yen defending its currency in a single-session operation followed by a rare coordinated round with the United States Treasury, the first joint Yen-buying action between the two countries since 1998.

Japanese government bond yields have risen in response to the administration's plan to cut the consumption tax on food to 1% for two years, but American yields have also risen with them, barely narrowing the differential that drives the pair.