Market Highlight 05.06.2026

USD/JPY continued to rise above 160,09 on Thursday, prompting warnings from the Japanese Government about the possibility of another foreign-exchange intervention following its most recent action on 30/4. The 160 level is widely seen by the market as a key threshold for potential official intervention. BOJ Governor Kazuo Ueda reinforced expectations of a rate hike in June in a shift toward inflation control, as the energy shock caused by the war in Iran is increasing the risk of price volatility in Japan. According to May foreign-exchange reserve data just released by Japan’s Ministry of Finance, foreign assets held, including Government bonds, fell by 75,6 billion USD from April. Total foreign reserves declined to 1,09 trillion USD by the end of May, while foreign-currency deposits were largely unchanged at 162 billion USD. These figures were released after the Japanese Government confirmed its late-April intervention in the foreign-exchange market, with a record size of 11,73 trillion yen, equivalent to 73,4 billion USD.

The USD edged down 0,12% from its two-month high on Thursday, supported by optimism over a ceasefire agreement in Lebanon. The key U.S economic data released during the day showed that service-sector activity improved in May as businesses proactively placed orders and rebuilt inventories in preparation for shortages and higher prices caused by the prolonged war in the Middle East. Financial markets are now expecting the FED to keep rates unchanged until 2027, as the U.S economy remains stable and continues to expand even as inflationary pressures are rising. Policy guidance from the new FED Chair at the next meeting, two weeks from now, will be closely watched. Domestically, interbank USD/VND fell by around VND 15 and closed yesterday at 26.335.

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