Last Updated on September 4, 2026 by Deon
The Japanese yen keeps getting stronger before US data comes out
The Japanese Yen kept getting stronger against main currencies on Thursday because traders were looking at upcoming US economic numbers and changes in what they think the central bank will do. The Yens strong performance made USD/JPY drop a lot and EUR/JPY and GBP/JPY also had a lot of selling pressure.
People who trade money are watching US Initial Jobless Claims and the ISM Services PMI because these reports might change what the US Dollar does and what people think the Federal Reserve will do next.
Japanese Yen is the performer among main currencies
The Japanese Yen was one of the best performers in the currency market keeping the momentum from a big rise on Wednesday. This move happened because there was a lot of demand for the Yen and more pressure on traders who had positions in USD/JPY and other Yen pairs.
USD/JPY dropped a lot quickly in the US trading session. The fast drop made some people think that maybe someone is trying to control the currency.. No one from Japan or the US has said anything about it.
By the time Europe started trading on Thursday USD/JPY was below 157.00 and near the lowest it has been in a month. EUR/JPY went toward 182.00 and GBP/JPY also dropped as the Japanese Yen stayed strong.
Expectations about the Bank of Japan support the Yen
Expectations about the Bank of Japan are still a reason why the Japanese Yen is doing well. More domestic economic activity has made people look closely at the chance that the central bank might tighten its policy more.
According to a report from FXStreet Japans services sector grew faster than in five months in August. Better numbers like this have made people think that Japans economy might be strong enough to handle tightening from the Bank of Japan.
For a time the Japanese Yen had a hard time because the interest rates in Japan were much lower than in the US.. As the Bank of Japan slowly moves away from its very loose money policy that gap might get smaller.
If the Bank of Japan becomes more strict that could help the Yen more especially if US economic data gets worse or if people think the Federal Reserve might not raise rates as much.
Concerns about intervention are still
Currency intervention is still a big thing for traders who deal with USD/JPY. Japanese officials have watched changes in the foreign exchange market especially when the Yen drops quickly.
The recent big drop in USD/JPY made people talk again about whether officials might do something to control changes in the currency. Without official action the idea that someone might act can change how traders behave.
Traders who have long positions in USD/JPY may be more careful when there is a chance of intervention. This can make selling happen faster if important numbers go past.
The recent price changes have made pressure on people who think the Yen will go down and made traders watch what Japanese officials say more closely.
US economic data is the thing now
Even though the Yen is strong the next big change in the forex market might depend on the US economic data. On Thursday people are looking at Initial Jobless Claims and the ISM Services PMI for August.
The ISM Services report is very important because the services part of the US economy is big. If the number is higher than expected that could help the US Dollar. Make people think the Federal Reserve might keep interest rates high.
If the data is weaker that could put pressure on the Dollar and let the Japanese Yen keep rising.
Recent US job data has already changed how people feel. The ADP number showed fewer people getting jobs. It did not change much about what people think the Federal Reserve will do.
So markets will keep looking at every economic report before making bigger bets on what the future of US interest rates will be.
US Dollar is weaker
The US Dollar Index stayed under 99.50 after losing a little in the session. A weaker dollar has helped main currencies, especially the Japanese Yen.
The Dollars future is still tied to what people think the Federal Reserve will do. Traders are looking at the chance of another rate increase. The latest data has made some changes in what people think.
According to the market comments from FXStreet the ISM Services PMI might not change what people think about the Federal Reserve unless the data is a surprise.
So forex traders are likely to look not at the main numbers but also at how bond prices and interest rate expectations change because of the data.
Oil prices and risks in the world add uncertainty
Other problems in the world are adding more uncertainty to financial markets. Talks about tensions between the US and Iran have kept traders watching and WTI oil prices stayed near $88.50.
Higher oil prices can make people worry about inflation, which might make central banks more careful about changing their money policy. For the US Dollar this could help if people think the Federal Reserve will keep rates high.
At the time times of uncertainty in the world can make people want to buy safe things like the Japanese Yen. So what happens in the world could still be a reason why JPY pairs do what they do.
USD/JPY outlook: numbers to watch
From the trading side going below 157.00 is an important event for USD/JPY. The pair has had a lot of pressure to go down. If it stays below this number more selling might happen.
What happens next will depend on whether the US Dollar can come after the new economic reports.
A strong ISM Services number and lower jobless claims could help US interest rates. Make USD/JPY more stable.. Weak numbers could make the pair drop more.
Meanwhile more people thinking the Bank of Japan will tighten more could still help the Yen. If the Dollar is weaker and the Bank of Japan is more strict that could be hard for people who want the Dollar to go up.
Other main currency pairs
The Japanese Yen has also shown up in other currency pairs.
EUR/JPY dropped a lot. Is near 182.00 and GBP/JPY also had a lot of selling and is near 212.00. The big drop in these pairs shows that the recent move is not about the US Dollar but about more people wanting the Japanese Yen.
At the time EUR/USD stayed up a little around 1.1600 and GBP/USD stayed near 1.3500. Gold also stayed strong because the weaker US Dollar and the recent market changes helped people want the precious metal more.
The Japanese Yen is still getting stronger as traders wait for US economic data. USD/JPY went under 157.00 and EUR/JPY and GBP/JPY also dropped as the demand for the Yen gets stronger.
The next big change in the market will probably depend on US Jobless Claims and the ISM Services PMI along with what people think the Federal Reserve will do. At the time better Japanese economic data and the chance that the Bank of Japan will tighten more are adding more support to the Yen.
For traders a mix of US data what the central bank thinks, worries about intervention and problems, in the world could keep things. The direction of USD/JPY will stay a focus especially if the pair keeps trading under the important 157.00 level.
