Yen skidded in Asian trade on Thursday to three-week lows against the US dollar, sharpening losses for the second straight session amid persistent concerns about the Japan-US interest rate gap.

The odds of a Fed interest rate cut in the summer dipped after the release of the Federal Reserves meeting minutes, with investors now awaiting more clues.

And following a recent spate of weak Japan data, its likely the Bank of Japan will maintain its current ultra-easy policies unchanged for sometime.

The Price

The USD/JPY pair rose 0.1% today to 156.90 yen, the highest since May 1, with a session-low at 156.66.

The yen lost 0.4% on Tuesday, the fourth loss in five days as long-term US treasury yields rebounded.

Interest Rate Gap

The US-Japan interest rate gap currently stands at 540 basis points in favor of the US, and will likely remain so for an extended duration.

US Rates

The recently released Federal Reserves meeting minutes showed that Fed officials are concerned about the suitable timing of a rate cut, with several members expressing concerns about consumers using riskier financing methods to cover costs due to inflation.

Fed officials pointed to the persistent risks of inflation, with factors including geopolitical events, and they focused on the impact on consumers, especially low-income workers.

Japanese Rates

Recent weak data from Japan on growth and the services sector proved disappointing, in turn hurting the odds of a Bank of Japans interest rate cut this year.

Yens Outlook

UBSs New York analysts believe that markets are ignoring the risks of a BOJ intervention once more, which continues to present a fresh risk of sudden movements.