• Japanese Yen rises as BoJ’s Takata urged abandoning standard semi-annual 0.25% interest rate hikes.
• US Dollar struggles after August ADP private employment added only 38,000 positions versus 47,000 expected.
• Markets continue pricing a two-thirds Federal Reserve rate hike probability ahead of upcoming Nonfarm Payrolls.

USD/JPY extends its losses for the second consecutive day, trading around 156.80 during the European hours on Thursday.

Yen jump revives talk of fresh Japan intervention

Analysts at ING highlight that the “near 1% fall in USD/JPY over a couple of minutes yesterday afternoon, and another slide overnight, sparked talk of another round of intervention,” as the sharp moves in the pair rekindled market speculation over renewed action by Japan’s authorities.

The USD/JPY pair depreciates as the Japanese Yen (JPY) gains strength following hawkish remarks from Bank of Japan (BoJ) board member Hajime Takata, which prompted traders to reprice their monetary policy expectations.

Speaking on Wednesday, Takata emphasized that 2026 marks a structural regime change driven by global economic growth and AI-linked investments, requiring central banks to adopt a different policy response. He argued that the BoJ must move away from its conventional pace of semi-annual rate increases and consider a broader range of options beyond standard 0.25% incremental hikes.

Meanwhile, the US Dollar faces headwinds following economic data that revealed a sharp cooling in the domestic labor market. Figures from ADP indicated that US private-sector employment added just 38,000 jobs in August, falling short of the 47,000 positions projected by economists.

US policy seen mirroring China’s neo-mercantilist playbook

Rabobank’s strategists argue that US policy is increasingly echoing the very practices Washington has long criticised in Beijing. They highlight that “now we see the US Treasury engaging in exactly the sort of behaviour that China is accused of,” adding that this is “kind of the point”: in their view, the US believes it is “fighting fire with fire by copying the Chinese neo-mercantilist model.”