As Japan and U.S. authorities continue taking steps to curb yen weakness, USD/JPY is expected to find downside support in the 156 range, while attention should also be paid to upside resistance in the 158 range.
Following the Japan-U.S. summit, it was reported that the Finance Minister had disclosed that the U.S. president expressed concern about yen weakness, prompting views that senior officials from Japan and the United States had confirmed cooperation to correct the yen’s weakness.
BOE Governor Bailey was said to have pointed to the difficulty of keeping interest rates unchanged while energy prices remain elevated, and to have stressed the difficulty of waiting until evidence of second-round effects is fully available.
U.S. durable goods orders for August outperformed market expectations, while the measure excluding transportation equipment fell short, indicating divergent trends across sectors. Orders for core capital goods reportedly rose sharply, driven by AI-related investment.
It was reported that the U.S. Treasury Secretary held a productive telephone discussion with Finance Minister Katayama, discussed the desirability of a strong yen reflecting Japan’s robust economic fundamentals, and confirmed the importance of maintaining communication in the currency markets.