Japanese Yen pauses advance as Treasury announcement supports US Dollar
- USD/JPY holds near recent lows amid broad-based Japanese Yen strength.
- The US Dollar finds some support following the Treasury’s buyback announcement.
- US PPI and CPI data take centre stage ahead of next week’s Fed meeting.
USD/JPY remains on the back foot on Wednesday but lacks follow-through selling as the US Dollar (USD) recovers following the Treasury’s announcement of a larger bond buyback. The pair trades around 153.50 after briefly falling below 153.00, its lowest level since February.
The US Treasury said it could buy back up to $6 billion of longer-dated debt on Thursday, above the previously indicated minimum of $4 billion per operation. US Treasury yields moved higher following the announcement, with the benchmark 10-year yield rising to around 4.85%, its highest level since November 2023.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 98.80 after recovering from 98.60, its lowest level since August 21.
Even so, the near-term technical and fundamental picture still favours the Japanese Yen (JPY). Expectations of faster Bank of Japan (BoJ) tightening, with a rate hike fully priced in for the September 17-18 meeting, are fuelling the unwinding of Yen-funded carry trades and the repatriation of overseas funds. These flows are helping the Yen strengthen without fresh intervention.
Traders now turn their attention to Thursday’s US Producer Price Index (PPI) and Friday’s Consumer Price Index (CPI) ahead of the Federal Reserve’s September 15-16 meeting. According to the CME FedWatch Tool, markets price in around a 60% chance of a 25-basis-point rate hike. Hotter inflation data could strengthen rate hike expectations and help USD/JPY rebound, while softer readings could push the pair lower.
Yen upside risk builds as USDJPY gravitates toward key BoJ decision
Strategists at Scotiabank highlight that “risk for the JPY remains firmly tilted to the upside” as market participants reassess sentiment and positioning, which “look increasingly offside in a market that has shifted from official intervention support and evolved to fundamentally-driven BoJ-led gains.” They note that “data releases have been limited and the calendar remains relatively empty into the end of the week, offering little in terms of event risk ahead of the BoJ decision on September 18th—where a 25bpt rate hike is fully priced.”
Against this backdrop, Scotiabank observes that “for USDJPY, recent price action leans toward support around 153 as we note the absence of any additional support ahead of the 2026 low near 152.” On the topside, they add that “in terms of resistance we now expect it at 155, given its role in providing prior support.”
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | -0.07% | -0.37% | 0.16% | -0.02% | 0.13% | 0.02% | |
| EUR | 0.06% | 0.00% | -0.29% | 0.24% | 0.04% | 0.21% | 0.10% | |
| GBP | 0.07% | -0.01% | -0.27% | 0.23% | 0.05% | 0.21% | 0.10% | |
| JPY | 0.37% | 0.29% | 0.27% | 0.52% | 0.33% | 0.46% | 0.39% | |
| CAD | -0.16% | -0.24% | -0.23% | -0.52% | -0.19% | -0.03% | -0.14% | |
| AUD | 0.02% | -0.04% | -0.05% | -0.33% | 0.19% | 0.16% | 0.07% | |
| NZD | -0.13% | -0.21% | -0.21% | -0.46% | 0.03% | -0.16% | -0.10% | |
| CHF | -0.02% | -0.10% | -0.10% | -0.39% | 0.14% | -0.07% | 0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
