Yen opens the week on a positive note

Yen rose in Asian trade on Monday against a basket of major rivals, resuming gains against the dollar after the Japanese government revealed it intervened into the forex market last month to prop up the local currency.

The gains are also underpinned by slower US 10-year treasury yields following somewhat stable personal spending data, which likely paves the way for Fed rate cuts this year as inflation tapers off. 

The Price 

The USD/JPY fell 0.2% today to 157.00 yen, with a session-high att 157.34.

 Yen lost 0.3% on Friday, after marking a one-week high earlier on Thursday at 156.37 yen per dollar. 

Yen rose 0.35% against the dollar in May, the first monthly profit in 2024 after Japanese government intervention. 

Official Intervention 

Data by the Japanese financial ministry showed authorities spent 9.79 trillion yen ($62.23 billion) to intervene in the forex market and support the yen. 

The data confirmed the doubts that the Bank of Japan intervened in a two-stage process last month, selling up massive amounts of dollars in order to prop up the yen and snatch back from a 34-year peak at 160.21.

US Yields

US 10-year treasury yields fell 0.3% on Monday extending losses for the third straight session and heaping pressure on the dollar.

The developments came after stable US inflation data last week, opening the door for Fed rate cuts this year. 

According to the Fedwatch tool, the odds of a Fed rate cut in September rose to 53%, and to 66% in November.