FX.co ★ Yen Remains Under Pressure

The Japanese yen weakened beyond 158 per dollar on Monday, erasing the previous session’s gains as the recent joint intervention by Tokyo and Washington failed to sustain momentum in the face of persistent structural headwinds. The currency continued to be pressured by wide interest rate differentials, growing fiscal concerns and elevated energy and import costs.

Fresh data also showed that Japan’s current account surplus narrowed in June, as robust exports of AI-related electronics were offset by higher imports driven by increased crude oil purchases.

At the same time, the Bank of Japan underscored rising risks of faster inflation in its summary of opinions from the July meeting, with one policy board member indicating that the pace of interest rate increases could accelerate. On Friday, the yen had strengthened sharply against the dollar after weaker-than-expected US employment data led traders to scale back expectations for a near-term interest rate hike by the Federal Reserve.