FX.co ★ Yen Pressured by Dollar Strength

The Japanese yen traded around 158 per dollar on Thursday, hovering near a three-week low as the greenback strengthened on the back of robust US private-sector activity data. The figures reinforced expectations of further interest rate hikes by the Federal Reserve. Rising US Treasury yields and elevated oil prices underscored growing inflation risks, adding additional downward pressure on the yen.

Market participants remained on high alert for potential government or central bank intervention as the yen moved closer to the closely watched 160 level. Reports indicated that the Bank of Japan conducted a rate check with market participants last Friday, a step often interpreted as a precursor to possible intervention. The BOJ’s rate hike last week was widely viewed as not hawkish enough, particularly as two policymakers dissented from the decision.

On the data front, S&P Global reported that Japan’s manufacturing growth slowed to a seven-month low in September, reflecting softer increases in both output and new orders.