Forex & Currency Watch — 2026-06-30

Market Snapshot

Top Movers

USD/JPY — +0.24% to 162.33 (four-decade high)
The dollar surged to a 40-year peak against the yen as the interest-rate differential between the US and Japan continues to attract carry-trade flows, despite intervention warnings from Tokyo officials.

EUR/USD — -0.19% to 1.1402
The euro weakened modestly as investors rotated into the stronger dollar ahead of US jobs data, with capital economics forecasting a drop to $1.10 by year-end.

GBP/USD — -0.13% to 1.3235
Sterling edged lower as the pound faced headwinds from dollar strength; traders await Fed speaker Kevin Warsh's commentary and US employment figures later this week.

What Moved the Tape

• Bank of Japan Intervention Risks: USD/JPY reached 162+ for the first time since the 1980s, prompting renewed talk of BoJ action. ING's Chris Turner highlights that traders are now bracing for potential official intervention as the yen sinks to levels unseen in four decades.

• US Labor Market Data Ahead: US JOLTS job openings came in at 7.594M in May, supporting a robust labor market narrative that underpins Federal Reserve rate-hold bets and dollar strength. Nonfarm payrolls are due Friday and will be key to repricing rate expectations.

• China PMI & Macro Momentum: Chinese manufacturing data released during the Asia session indicated factory activity is stabilizing; yuan traders are watching for shifts in PBOC guidance as Beijing balances growth concerns with currency stability.

Central Bank Watch

Federal Reserve: US labor data (JOLTS job openings at 7.594M in May) continues to signal resilience, supporting the Fed's hold stance. Investors await Friday's nonfarm payrolls and Fed speakers (including Kevin Warsh) this week to clarify the rate path.

Bank of Japan: BoJ officials are under growing market scrutiny after USD/JPY breached 162, the highest level in 40 years. Intervention talk is intensifying, though the central bank has not yet announced formal action. The wide US-Japan rate differential remains the primary driver of yen weakness.

ECB: The ECB Forum is scheduled for this week; market participants are monitoring for any hawkish surprises or shifts in tightening expectations that could support the euro.

Emerging Markets & Asia FX

Chinese Yuan: Yuan stabilized after China's June PMI data came in line with expectations. Traders continue to monitor PBOC guidance on the currency; the yuan faces headwinds from a strong dollar but remains supported by the carry-trade narrative.

Japanese Yen: Under severe pressure at 40-year lows; carry-trade demand and the persistent Fed-BoJ rate differential are overwhelming intervention concerns. The pair remains a key focus as BoJ officials weigh formal action.

EM Currencies Broadly: Most Asian and emerging-market currencies are trading weaker against a resilient dollar, with traders citing strong US labor data and a flight to safety ahead of Friday's payrolls report.

Strategist Takes

Natixis: The research house believes the dollar rally has peaked and recommends selling the greenback, anticipating a reversal later in the year as rate expectations normalize.

ING (Chris Turner): USD/JPY has broken above 2024 highs, with traders now focused squarely on potential BoJ intervention. Turner notes the market is pricing in official action risk, though carry-trade demand remains resilient on the wide rate differential.

What to Watch Next

• US Nonfarm Payrolls (Friday, July 3, 8:30 am ET): The headline employment report will be crucial for repricing Fed rate expectations and could trigger significant dollar volatility. A stronger-than-expected print would extend USD strength; a miss could ease near-term greenback gains.

• ECB Forum Economic Conference (This Week): Speakers and policy guidance may provide clues on the ECB's next moves; any hawkish signals could support the euro.

• Fed Speaker Kevin Warsh (This Week): Commentary on monetary policy and the inflation-growth trade-off will be closely monitored by rates and currency traders.

• BoJ Intervention Watch (Ongoing): If USD/JPY remains elevated near 162+, the likelihood of official yen-support measures increases materially, potentially triggering sharp intraday reversals.

Reader Action Items

1. Watch USD/JPY intervention risk closely: The pair's 40-year high (162.30) and persistent BoJ commentary suggest downside volatility could strike suddenly. Set alerts at 162.50 and watch for official BoJ statements.

2. Position ahead of Friday payrolls: US jobs data is the week's biggest catalyst. EUR/USD, GBP/USD, and AUD/USD are most sensitive to an NFP miss; consider tightening stops or reducing exposure until after 8:30 am ET Friday.

3. Monitor dollar-carry reversal risk: Natixis's "peak dollar" call and growing BoJ intervention talk suggest a potential near-term ceiling for USD strength. If Friday's payrolls disappoint or BoJ acts, mean-reversion trades could snap into gear—watch for capitulation in JPY shorts and euro shorts.