Week in review

The USD/JPY opened the week at 156.98. The pair briefly fell to a low of 156.59 early in Asian trading on 21 September during Japan's extended holiday, but then edged steadily higher amid broad dollar strength. It reached around 157.50 on 22 September before briefly falling sharply to below 157, but the move was short-lived, and the USD/JPY rose above 158 on 23 September. Broad dollar strength continued after the holiday on 24 September, supported in part by expectations that the Fed could bring forward its next rate hike, and the USD/JPY rose to a high of 159.03. The pair subsequently struggled to extend its gains amid caution over possible intervention by the Japanese authorities. As of writing on 25 September, the USD/JPY had pulled back below 158.50 following comments from Finance Minister Satsuki Katayama (Figure 1). The dollar continued to strengthen across-the-board this week. The Australian dollar, which had outperformed last week, was relatively weak (Figure 2).

FIGURE 1: USD/JPY

Note: As at 13:00 JST on 25 September
Source: EBS, Refinitiv, MUFG

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

Note: As at 13:00 JST on 25 September
Source: Bloomberg, MUFG