USD Retreats Ahead of FOMC Minutes, Boosting JPY

The US Dollar (USD) has lost momentum ahead of the Federal Open Market Committee's (FOMC) minutes release, causing the USD/JPY pair to edge lower on Wednesday.

At the time of writing, the pair trades around 159.10, down 0.32% on the day.

The reduced expectations of a September Fed rate hike have weighed on the US Dollar, while intervention risks and hawkish Bank of Japan (BoJ) expectations discourage traders from building large bearish positions against the Japanese Yen.

Analysts at MUFG note that 'in Japan, markets have continued to price in more BoJ tightening for the next 12 months', which has helped stabilize USDJPY around the 160.00 level and contained further yen depreciation for now.