In today's overseas markets, dollar-yen movement is expected to struggle to gain momentum against a backdrop of persistently elevated US long-term yields, while concerns over coordinated US-Japan intervention remain. With crude oil prices continuing to fall, the outlook will depend on developments in the Middle East and the course of US long-term yields.
In the European and US foreign exchange markets on the 28th, dollar-yen appeared likely to struggle to gain momentum. US long-term yields remained at elevated levels, and some market participants expected dollar buying on the perception that the dollar was undervalued to continue, while others pointed to heightened concerns over coordinated US-Japan intervention against a backdrop of the US president's efforts to restrain yen depreciation.
Crude oil prices fell sharply on news over the previous weekend, but long-term yields remained at elevated levels amid concerns that the Federal Reserve would maintain its tightening stance. Euro-dollar softened from around $1.1410 to the $1.1380 range, while dollar-yen fell briefly to the ¥156.90 range before returning to around ¥157.
In the overseas markets ahead, developments in the Middle East and the course of US long-term yields are expected to provide the main cues. The reopening of the Strait of Hormuz remains uncertain, and dollar buying could lead if the decline in crude oil prices is not limited. On the other hand, some market participants believe that a significant rise will be difficult as employment-related data releases continue.
Concerns over coordinated US-Japan intervention remain strong, and dollar-selling and yen-buying pressure is expected to continue. Many market participants believe that upside will remain limited even if dollar-yen rises into the ¥158 range.