Concern over accelerating Bank of Japan rate hikes, weaker-than-expected US ADP data, and caution over intervention weighed on USD/JPY, which fell to as low as 158.19 yen.

【9/2Market Overview

Tokyo time, in the morning, the USD/JPY rose to10year-bond yield rise led to160.39yen, and then after Takata Bank of Japan/ Board of Governors member indicated that “not in a scenario of twice-a-year meetings as before, but we need to take flexible responses” and “a situation where further rate hikes are possible,” the pair fell back to159.42yen. In European trading hours, the dollar/yen was bought back and159.92yen rose, but the pullback was limited.NY time,8month USADPemployment data showed3.8thousand increase versus the forecast4.8thousand increase, and the words of Fed’s Williams regarding NYFed President stating that “inflation is on a path of gradual decline” and “rates are at an appropriate level” also triggered dollar selling. Additionally, the market speculated that government/Japan’s intervention in the currency market was increasing in caution, and the USD/JPY fell to158.19yen.

【9/3Market View