Anna 
The USD/JPY pair extends its upward momentum for a second consecutive session, trading around 154.00 during European hours. The ongoing correction in the US Dollar (USD) is bolstering the pair, supported by investor sentiment favoring the Greenback. However, prospects for US interest rate cuts following softer labor data from Friday could present resistance to further gains.
Bloomberg reports that Richmond Federal Reserve (Fed) President Thomas Barkin highlighted concerns about elevated interest rates potentially restraining US economic growth. While higher rates could help curb inflationary pressures, Barkin stressed the importance of sustained evidence of declining inflation before considering adjustments to borrowing costs. Notably, he cited persistent inflation risks in housing and services sectors as factors contributing to elevated price levels.
The US Dollar Index (DXY), tracking USD performance against major currencies, is trading higher around 105.20. However, gains in the USD are tempered by weaker US Treasury yields. At present, 2-year and 10-year US Treasury bond yields stand at 4.80% and 4.45%, respectively.
In Japan, Masato Kanda, Japan’s top currency diplomat, hinted at potential measures to address excessive market fluctuations, reflecting recent volatility in the Japanese Yen (JPY). Last week, the JPY appreciated amid speculation of government intervention, with the Bank of Japan (BoJ) reportedly allocating significant funds to support the JPY.
Masakazu Tokura, Chairman of KEIDANREN (Japan Business Federation), emphasized the importance of FX rates reflecting economic fundamentals over the medium to long term. While uncertain about intervention timing, Tokura noted the opportune nature of any potential action, as reported by forexlive.com.
