Yen Stabilizes Ahead of BoJ Minutes Amid Hawkish Shift

The Japanese Yen has steadied near post-intervention highs ahead of the Bank of Japan's Monetary Policy Meeting Minutes on Wednesday. The USD/JPY pair is trading with a soft tone near the 156.90 area, as investors await clues on how widely the hawkish shift has spread across the board.

The BoJ left its short-term rate unchanged at 1.00% last week in an 8-1 vote, with Governor Kazuo Ueda signaling that the central bank could accelerate the pace of tightening and would avoid falling behind the inflation curve. Markets have since brought forward the expected timing of the next hike, narrowing the interest rate differential that has driven the pair to multi-decade highs this year.

The US ADP Employment Change is due on Wednesday, with the private payrolls gauge seen easing to 70K in July from 98K in June. A print in line with or below that estimate would point to a cooling labor market and could undermine the recent rebound in Treasury yields, adding to the pressure on USD/JPY.