USD/JPY Pauses Amid Intervention Risks, Hawkish BoJ Expectations
The Japanese Yen (JPY) has edged higher amid intervention risks, but remains close to its four-decade low against the US Dollar (USD). The USD/JPY pair consolidated on Thursday as traders remained on high alert due to looming intervention risks.
Japan's Finance Minister Satsuki Katayama reiterated that the government is ready to take decisive action on foreign exchange if needed. The hawkish Bank of Japan (BoJ) expectations lend some support to the JPY, which has been acting as a headwind for the USD/JPY pair.
The stark contrast in monetary policy between Japan and other major economies keeps the carry trade active, which has contributed to the JPY's underperformance. Economic risks stemming from energy supply disruptions due to the Middle East conflict also undermine the JPY.