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The yen pared gains as the dollar strengthened, boosted by rising bond yields. However, the yen’s volatility is expected to continue as the market speculates that Japanese authorities will take intervention measures after weaker-than-expected US consumer price index (CPI) data.
Any intervention measures can only be confirmed when the Ministry of Finance releases the latest intervention data at the end of this month.
Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said he is ready to take all available measures on the foreign exchange front. Hayashi pointed out that the Bank of Japan (BoJ) will decide on the specific content of monetary policy. He expects the Bank of Japan to take appropriate measures to achieve the 2% price target in a continuous and stable manner, Reuters reported on Friday.
The Bank of Japan may raise interest rates at its upcoming July meeting. This expectation boosted the yen, causing USD/JPY to fall.
