The USD/JPY opened the week at 146.08. The market moved slowly during Tokyo trading hours on 4 September (which was a holiday in the US), and the USD/JPY remained in the lower 146 range. It rose to around 146.50 after trading in European hours kicked off but did not move significantly. However, the dollar strengthened across the board when UST trading resumed on 5 September, because USTs were sold (meaning yields rose) in response to US employment data released on Friday (1 September).

The USD/JPY also rose intermittently in Tokyo trading hours, rising above 147 around the time the Europeans entered the market. Oil prices rose further after Saudi Arabia decided to extend its oil output cuts, which also helped to strengthen the dollar.

The USD/JPY continued its climb, breaking past the 29 August high and moving above 147.50. Vice Finance Minister for International Affairs Masato Kanda's warnings of government intervention early morning on 6 September worked to curb the rise in the USD/JPY. The pair did not lose significant ground but remained directionless around the 147-level due to renewed concerns that the Japanese authorities were ready to stop the yen from falling further. However, UST yields rose after the ISM non-manufacturing index announced on the same day beat market expectations, and the USD/JPY rose to a high for the week of 147.87 on the morning of 7 September in Tokyo trading hours, although it fell back before reaching JPY148. The USD/JPY fell to as low as around 147 for a time as the rise in UST yields was curbed, then briefly fell to the upper 146-level on the morning of 8 September.

It was trading below 147.50 at the time of writing this report (Figure 1). This week, the dollar strengthened almost across the board, especially on 5 September after the US holiday. The yen was relatively strong among G10 currencies this week, despite the USD/JPY rising to the highest point since November 2022. The yen has actually strengthened against currencies such as the Australian dollar, partly due to the AUD's strong connection with the Chinese yuan, which weakened (Figure 2).