The US dollar declined against major currencies on 2 July 2026 as Japan implemented unsignalled intervention in currency markets to counter yen short sellers, with the Japanese yen having hit 40-year lows prior to the move. The USD also fell against the euro by 0.26% and against sterling by 0.37%, with markets simultaneously cautious ahead of an early-released US non-farm payrolls report brought forward due to the 4 July holiday.
USD/JPY fell 0.70% on the day, breaking through key moving averages following the intervention action. The move came during the Asia-Europe trading handover. Natixis chief APAC economist Alicia Garcia Herrero stated that the yen's sharp appreciation would be unlikely without intervention, given prevailing market expectations for strong US economic data.
USD/JPY, the direct exchange rate between the US dollar and Japanese yen, recorded the 0.70% decline as the primary instrument affected by the intervention. EUR/USD and GBP/USD each moved higher as the dollar softened more broadly, with EUR/USD up 0.26% and GBP/USD up 0.37%.
Japan's finance ministry declined to comment on the sudden yen movement, consistent with the unsignalled nature of the intervention. Non-farm payroll expectations for the forthcoming report stood at 110,000, materially below the prior month's 172,000, adding to dollar softness in the lead-up to the release.
Sources: Finnhub, Bloomberg Markets