Week in review

The USD/JPY opened the week at 157.58. The pair fell sharply early in Tokyo trading on 3 August after the MOF released a statement from Finance Minister Satsuki Katayama confirming coordinated intervention by Japanese and US authorities, sinking to a low of 155.20 following subsequent comments from Katayama and Vice Minister of Finance for International Affairs Atsushi Mimura. The USD/JPY gradually recovered after the initial decline and approached 158 on 4 August. Gains were capped for a time as both Japan and the US indicated that they remained prepared to intervene again. During US trading on 6 August, the pair moved above 158 and then rose to around 158.50 following reports that Fed Chair Kevin Warsh could consider a September rate hike depending on upcoming inflation data, among other factors. The pair was trading above 158 at the time of writing on 7 August (Figure 1). The dollar's decline following last week's FOMC meeting and the subsequent coordinated Japan-US intervention paused this week. Moves among the major currencies were generally limited to within 1% in either direction (Figure 2).

FIGURE 1: USD/JPY

Note: As at 14:00 JST on 7 August
Source: EBS, Refinitiv, MUFG

FIGURE 2: MAJOR CURRENCIES' RATE OF CHANGE VS USD THIS WEEK

Note: As at 14:00 JST on 7 August
Source: Bloomberg, MUFG