Week in review
The USD/JPY opened the week at 146.43. It temporarily rose above 147 on 2 September amid a limited number of participants during the Labor Day holiday in the US and following upward revisions to overall preliminary PMI data from various countries in Europe. However, the pair became top heavy around 147 and declined on 3 September due to a rise in JGB yields following the 10y JGB auction and a fall in Japanese and Chinese share prices. The USD/JPY fell steadily to around 145 on 4 September during the Tokyo session, partly because the ISM manufacturing index for August, announced in US hours, was lower than the market had forecast. The USD/JPY fell further after the job openings and labor turnover survey (JOLTS) for July announced on the same day fell steeply, including a downward revision for the number of job openings in June. In addition, the Fed's Beige Book pointed to a slowdown in US economic activity, and the USD/JPY fell below 144. The pair was trading at the 143 level on 5 September, fell swiftly below 143 after the US ADP employment report for August missed the market's forecast, then rose back above 144 after the ISM non-manufacturing index slightly beat expectations. However, the USD/JPY became top-heavy on 6 September ahead of the US payrolls report and had fallen to around 142.50 at the time of writing this report (Figure 1). The yen was notably strong among G10 currencies this week, with the dollar sitting roughly in the middle of the pack. Commodity currencies softened due in part to a decline in oil prices (Figure 2).
FIGURE 1: USD/JPY
Note: Through 14:00 JST on 6 September
Source: EBS, Refinitiv, MUFG
FIGURE 2: MAJOR CURRENCIES' RATE OF CHANGE VS USD THIS WEEK
Note: Through 14:00 JST on 6 September
Source: Bloomberg, MUFG
