The Japanese yen continued to trade sideways against the U.S. dollar near a multi-year low with traders remaining cautious as Japanese authorities hinted at possible actions to support the currency if necessary.
Yesterday, Japan’s financial authorities, including the Bank of Japan (BOJ), the Finance Ministry, and Japan’s Financial Services Agency, organized a meeting to address the yen’s weakness, indicating their readiness to intervene in the market which could help put a floor under the yen at current levels.
Masato Kanda, the vice finance minister for international affairs, highlighted the BOJ’s commitment to utilizing monetary policy tools if currency dynamics negatively impact the economy and price stability.
As a result, the USDJPY pair could be exposed to some risks and volatility as traders could react to the release of Japanese and US economic data later today and tomorrow with the release of Japan’s Industrial Production figures, retail sales, and Tokyo’s Core CPI on one side and the US job market data, GDP figures and PCE data on the other.
Stronger-than-expected US data could weigh on the yen and could potentially raise the risks of an intervention from the Japanese central bank.
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