The yen is trading at the high 146 yen range against the dollar, with yen selling likely to continue ahead of the U.S. employment data

(Bloomberg):On the 3rd, the yen was trading at the upper 146 yen range against the dollar, the lowest level in two weeks, on the Tokyo foreign exchange market. While the US stock and bond markets were closed for the Labor Day holiday, the yen was sold in the European market due to position adjustments. With the US employment statistics due to be released over the weekend, the yen is likely to weaken as expectations of a major US interest rate cut have subsided.

Yukio Ishizuki, senior currency strategist at Daiwa Securities, says that with a 50 basis point (bp, 1 bp = 0.01%) interest rate cut at the September Federal Open Market Committee (FOMC) meeting being positioned as a risk scenario, “yen-buying positions are likely to be unwound as investors expect the yen to not appreciate significantly.”

The market is aware of the possibility that the September interest rate cut will be 25 basis points rather than 50 basis points, as it is believed that the U.S. economy will be able to make a soft landing.

In a report dated the 3rd, Nomura Securities chief currency strategist Yujiro Goto pointed out that as speculators’ positions turn to long yen, in the absence of any notable events, the market conditions are such that position adjustments are likely to lead to a gradual weakening of the yen.

The yen is trading at the high 146 yen range against the dollar, with yen selling likely to continue ahead of the U.S. employment data

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