Japanese Yen flatlines near 161.50 as traders are on high alert for intervention
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USD/JPY trades flat around 161.55 in Tuesday’s early Asian session.
US Vice President hails ‘great progress’ in US-Iran talks despite ‘threatening’ and ‘whining.’
Japan’s Katayama said officials are ready to respond appropriately to FX moves at any time as needed.
The USD/JPY pair holds steady near 161.55 during the early Asian session on Tuesday. Progress in US–Iran peace talks and intervention fears from the Japanese authorities might cap the upside for the pair. Traders will closely monitor the developments surrounding the ongoing talks in Switzerland between Washington and Tehran.
US Vice President JD Vance said on Monday that talks between the US and Iran have made “great progress” despite “threatening” and “whining.” Earlier, Iran’s Foreign Minister, Abbas Araghchi, stated the negotiations had yielded “major progress.”
Traders are on high alert for currency intervention after further weakness in the JPY. Japan’s Finance Minister Satsuki Katayama said on Monday that the officials are ready to respond appropriately to the currency moves at any time as needed.
On the other hand, a hawkish tone from the US central bank might help limit the US Dollar’s (USD) losses. Last week, the Federal Reserve (Fed) decided to leave its benchmark interest rate unchanged between 3.50% and 3.75%. Fed new projections and comments from Kevin Warsh, who was presiding over his first meeting as chair, were more hawkish than markets anticipated.
Futures traders have priced in that the US central bank is likely to hike rates by 25 basis points (bps) at its September meeting, with some chance seen of a move as soon as next month’s meeting.
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