FX.co ★ Yen Remains on Intervention Watch

The Japanese yen traded around 159.3 per dollar on Thursday, hovering near the key psychological threshold of 160 and keeping markets on alert for possible additional intervention by authorities amid persistent currency weakness. The yen remained under pressure from structural factors, including wide interest rate differentials, rising fiscal concerns, and elevated energy and import costs. It also failed to gain traction even after softer US inflation data eased expectations of near-term interest rate hikes by the Federal Reserve.

On the domestic front, Japan’s producer prices rose 7.2% in July, slightly slower than June’s 7.3% increase and below market forecasts of 7.4%. Meanwhile, the Bank of Japan, in its summary of opinions from the July meeting, underscored mounting risks of faster inflation, with one policy board member indicating that the pace of interest rate hikes could be stepped up.