Japanese Yen: Debt concerns shape FX outlook – Rabobank

FXStreet Insights Team FXStreet

Rabobank's Senior FX Strategist Jane Foley discusses USD/JPY in context of fiscal and debt dynamics in Japan and the United States (US). She highlights how government spending plans, changing demand for long-dated debt and Treasury Secretary Bessent’s buyback plan have influenced the Dollar and Japanese Yen. Rabobank maintains a 3‑month USD/JPY forecast of 158, while warning of potential near‑term upside attempts.

Fiscal risks weigh on USD/JPY

"As the USD fell yesterday following news of Bessent’s buyback plans, USD/JPY was steered a little further away from the psychologically important 160 level."

"On the assumption that the BoJ will accelerate the pace of rate hikes, we maintain a 3-month USD/JPY forecast of 158, though we cannot rule out the possibility of further attempts at the upside in the near-term."

"That said, in our view the USD will continue to draw support from its dominant position within the global payment system, indicating that it can retain its safe haven status."

"Firmer BoJ policy rates, structural reforms and a resilient economy suggest there is a path for the JPY to find support in the months ahead."

"That said, Japan’s 2027 budget talks later this year could have a strong impact on market sentiment."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD clings to gains above 1.3600 on persistent USD weakness

GBP/USD stays in positive territory well above 1.3600 after retreating slightly from the six-month peak it set above 1.3650 earlier in the day. The US Dollar (USD) stays on the back foot and allows the pair to hold its ground after suffering heavy losses on the US Treasury Department's decision to ramp up long-term bond purchases on Wednesday.

EUR/USD retreats from three-month high, trades below 1.1700

EUR/USD loses its bullish momentum and trades flat on the day below 1.1700 after setting a three-month high earlier in the day. Nevertheless, the pair's downside remains limited as the US Dollar (USD) struggles to gather strength following the US Treasury Department's decision to boost long-term bond purchases.

Gold pares gains as US Treasury yields, Dollar recover

Gold (XAU/USD) extends its intraday decline at the start of American trading hours on Thursday as US Treasury yields and the US Dollar stabilise following the previous day’s sharp pullback.

Crypto Today: Bitcoin, Ethereum, XRP extend gains as ETFs inflows and improved sentiment boost outlook

Cryptocurrency prices are extending gains on Thursday, led by Bitcoin’s (BTC) climb above $70,000. Ethereum (ETH) remains bullish, trading above $2,200, while Ripple (XRP) has recovered above $1.15 as bulls tighten their grip.

US Treasury doubles long-dated bond buybacks: Why are yields rising again?

US Treasury yields stabilize on Thursday after Wednesday’s sharp decline, with the 10-year yield edging back up to 4.672%. The US Treasury doubled the size of some long-dated debt buybacks, a surprise decision that helped ease the recent surge in yields.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.