Against a backdrop of a widening Japan-US interest-rate differential and expectations of Fed rate hikes, the yen fell against the dollar in the Tokyo market early on the 12th. The rate was in the upper ¥159 range as of 8:30 a.m., and concerns about the approach toward ¥160 are fueling expectations of intervention.
In the Tokyo foreign exchange market early on the 12th, the yen was falling against the dollar, with trading at around ¥159.70–¥159.72 per dollar as of 8:30 a.m. The yen was down approximately ¥0.83 against the dollar from 5:00 p.m. the previous day. This reflected expectations that the Japan-US interest-rate differential would widen against a backdrop of expectations for an accelerated pace of US monetary tightening. With the psychologically significant ¥160 level in focus, concerns about yen-buying intervention are also intensifying.
Following the US consumer price index (CPI) coming in above market expectations, reports that Fed Governor Christopher Waller had suggested the possibility of a large rate hike at an FOMC meeting later this year have also contributed to a growing view that dollar buying is strengthening.
In overseas markets on the 11th, the yen fell at one point to around ¥159.94, and speculation about yen-buying intervention by the Japanese government and the Bank of Japan remains. Against the backdrop of the previous rise in the yen-dollar exchange rate, there are also expectations that position adjustments could prompt yen buying and dollar selling in the Tokyo market on the 12th.
In European currencies, the yen edged higher against the euro, with the euro at the low ¥177 range as of 8:30 a.m. The euro fell against the dollar, trading at $1.1094–$1.1095 at the same time, approaching levels near its previous lows.