Week in review

The USD/JPY opened the week at 161.78. The pair edged higher from the start of the week, reaching the 162 range around the Tokyo fixing on 30 June. The pace then picked up somewhat, and the pair rose to this week's high of 162.84 on 1 July. However, the dollar turned lower during US trading hours that day after Fed Chair Kevin Warsh said inflation risks had receded, pushing the USD/JPY below 162.50. The topside remained heavy on 2 July amid lingering concerns about intervention by the Japanese authorities, and the pair fell sharply around the European open. The decline accelerated after the USD/JPY broke below 162, with the pair then slipping below 161. The USD/JPY temporarily rebounded to around 161.50, but broad dollar weakness after the US employment report came in below market expectations pushed it down further to a low of 160.64. The pair quickly recovered to around 161, and at the time of writing on 3 July was edging higher in the low 161 range (Figure 1). The dollar weakened across the board against G10 currencies this week, partly because of the employment report. The yen was relatively weak within that broader dollar-selling environment (Figure 2).

FIGURE 1: USD/JPY

Note: As at 13:00 JST on 3 July
Source: EBS, Refinitiv, MUFG

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

Note: As at 13:00 JST on 3 July
Source: Bloomberg, MUFG