The yen held steady near 157.7 per dollar on Wednesday, after a rare joint intervention by Japan and the United States pulled it back from a 40-year low at the end of last week. Meanwhile, the broader dollar slipped to a six-week low as falling oil prices tied to U.S.-Iran talks lifted risk appetite, even as traders weighed a possible September Fed rate hike.
The USD/JPY pair traded largely flat at 157.7 yen on Wednesday, holding the ground it gained after the currency fell sharply at the end of last week. That drop followed coordinated yen-buying intervention by Tokyo and Washington, the first joint action of its kind in decades.
Bessent pledges support for the yen
The intervention eased pressure on the yen after it had fallen to a 40-year low. U.S. Treasury Secretary Scott Bessent said Washington would "do whatever it takes" to support the yen and ensure orderly currency markets.
Dollar index slips on Iran optimism
The US Dollar Index edged down 0.1% to 99.78, its weakest level in about six weeks. Oil prices slipped for a third straight session after Qatar said an interim proposal had been drafted to narrow differences between Washington and Tehran.
An Axios report said Washington aimed to announce the deal Wednesday, with the U.S., Iran and Oman nearing an interim agreement to reopen the Strait of Hormuz. Yet ING analysts said a risk-on backdrop would normally push the dollar lower, arguing that uncertainty over Fed policy and a healthy U.S. economy have kept it supported instead.
Fed rate path in focus
The dollar index continues to trade near 100, which ING linked partly to lingering expectations that the Fed might still raise rates on Sept. 16. Market attention will shift later this week to U.S. non-farm payrolls data, which could shape expectations for the Federal Reserve's next move on the interest rate hike question.
Source: Forex News
Trading involves risk.
Risk Disclaimer
