The preliminary US manufacturing PMI for October and the final University of Michigan consumer confidence reading both exceeded expectations, and the dollar broadly maintained its firm tone. Heightened tensions in the Middle East and higher crude oil prices are pushing up long-term interest rates through US inflationary pressure, supporting the dollar.
In the New York market on the 23rd, the dollar-yen pair fell briefly to the upper ¥156 range before rebounding to ¥157.08 and closing at ¥156.86.
The preliminary US manufacturing PMI for October and the final University of Michigan consumer confidence reading for October both exceeded expectations, while long-term interest rates rose against a backdrop of higher crude oil prices. This encouraged dollar buying.
On the 26th, higher crude oil prices resulting from heightened tensions in the Middle East are expected to continue pushing up long-term interest rates through US inflationary pressure, providing support for the dollar.
On the other hand, if higher crude oil prices weigh on economically sensitive and consumer-related stocks and drive down share prices, risk-averse yen buying could intensify. With the Bank of Japan's Monetary Policy Meeting ahead this week, speculation over whether the BOJ will raise interest rates and Governor Ueda's remarks could influence the market. The situation in Europe also warrants attention.