USD/JPY's Upward Pressure May Persist Into 3Q

USD/JPY’s upward pressure is expected to continue in 3Q, backed by the resilience of the U.S. economy, according to BofA Securities Japan. The brokerage notes that the elevated carry and Japan’s structural deficit will likely support USD/JPY. With holidays in Japan, FX liquidity may remain thin during Asian trading. Japanese authorities could intervene if necessary, with the estimated FX intervention amount possibly surpassing that of 2022. USD/JPY is currently at 156.93.

USD/SGD is trading steadily in the Asian session and may benefit from reduced expectations of Fed rate cuts. The allure of U.S. fixed-income assets and demand for the greenback could offer support. Nonfarm payrolls and other U.S. economic data will be closely watched. SMBC expects some bid in USD as the Fed turns less dovish at this week’s meeting. USD/SGD is currently at 1.3623.