As views spread that the dollar's upward trend will continue, the market is expected to remain supported by higher oil prices and elevated US long-term interest rates ahead of the release of US employment indicators.
The Tokyo market is trading quietly due to month-end factors, while the dollar's firm tone remains intact, with safe-haven dollar buying pressure and rising US interest rates providing underlying support for the dollar. NY crude oil futures are trading in the $94 range, while the US 10-year Treasury yield is around 5.25%. Moves to support the dollar's downside are evident against the backdrop of dollar strength.
In dollar-yen trading, in addition to concerns being expressed over an undervalued yen during talks between Finance Minister Katayama and US Treasury Secretary Bessent, the Takaichi administration's indication that it does not support reflationary policies has heightened caution over direct official intervention in the area from the ¥158 range to just below ¥160. This is likely to cap the upside, leaving buying and selling factors evenly matched.
US employment indicators will be released one after another this week, and attention is focused in particular on trends in employment-related indicators such as job openings ahead of this weekend's US employment report. The market expects the number of jobs to be below the previous reading, and the forecast for the US consumer confidence index is also below the previous reading.
Dollar buying pressure is considered dominant against European currencies, while buying on dips is likely against the yen. Speeches by ECB and Fed officials are scheduled as speaking events, while some technical indicators suggest that the pound-dollar downtrend may continue.