In the New York market on the 10th, USD/JPY rose to the upper ¥158 range and closed at ¥158.74. Expectations for further Fed rate hikes strengthened after US CPI and ADP employment data came in above expectations.
In the New York market on the 10th, USD/JPY traded in a range of ¥158.14 to ¥158.85, closing at ¥158.74. The market bought dollars on stronger-than-expected US inflation and employment data, strengthening expectations for further Fed rate hikes.
The US Labor Department's October CPI rose 0.4% m/m, exceeding the 0.3% market forecast, while the core index also rose 0.3%, above expectations. ADP employment data also exceeded expectations, indicating persistent inflationary pressure.
Comments from Fed officials came in succession, strengthening expectations that the FOMC will support a 25-bp rate hike in December. Against a backdrop of rising long-term yields and a widening Japan-US yield gap, yen selling and dollar buying accelerated.
The euro fell against the dollar from the lower 1.12 range to the mid-1.11 range, while USD/CHF rose. Market expectations are growing that the yen's downtrend will continue against a backdrop of expectations for a December rate hike.