• The Japanese Yen appreciated as Labor Cash Earnings grew by 3.6% YoY in July.
• BoJ Board Member Hajime Takata stated that the domestic economy is recovering moderately although some weak signs were seen.
• The upside in US Treasury yields provides support for the US Dollar.

The Japanese Yen (JPY) holds ground against the US Dollar (USD), buoyed by a second straight month of rising real wages in Japan. In July, Japan’s Labor Cash Earnings grew by 3.6% year-on-year, a deceleration from June's 4.5% increase but the highest since January 1997, surpassing market expectations of 3.1%. This strong performance reinforces speculation that the Bank of Japan (BoJ) may implement another interest rate hike before the end of 2024.

Bank of Japan (BoJ) Board Member Hajime Takata made some comments on the bank’s policy outlook and economic prospects during his speech on Thursday. Japan's economy is recovering moderately although some weak signs were seen. Stock and FX markets have seen big volatility but we still see achievement of our inflation target in sight.

Read the full article: Hard to debate at this stage to what degree BoJ can shrink its balance sheet — BoJ’s Takata

The US Dollar recovers its recent losses, driven by improved US Treasury yields. However, the Greenback faced challenges after July's US JOLTS Job Openings came in below expectations, signaling a further slowdown in the labor market. Traders now await US ISM Services PMI and Initial Jobless Claims scheduled to be released on Thursday.