In foreign exchange trading on the 15th, stronger-than-expected Chinese production, elevated long-term US interest rates and higher oil prices encouraged dollar buying. Speculation about US-Japan coordinated yen intervention was also reported, and dollar/yen is expected to make a significant move today.
In foreign exchange trading on the 15th, China’s August industrial production rose 5.2% year on year, exceeding market expectations, while retail sales fell short of forecasts. The UK ILO unemployment rate was 4.9%, unchanged from the previous month, while wage growth held at 3.5% year on year. The US 10-year Treasury yield approached approximately 5.04%, its highest level in roughly 19 years, since 2007, and bond selling progressed alongside rising oil prices. The German ZEW Economic Expectations Index came in at 34.7, below expectations but slightly higher than the previous month.
The US Treasury Secretary said that the amount involved in coordinated US-Japan yen-buying intervention was “very small” and expressed the view that a stronger yen would benefit US exporters. Against this backdrop, dollar/yen is expected to be driven by FOMC-related information due today, and could move in either direction depending on the dot plot and the content of Chair Powell’s comments.