Dollar-yen was little changed in European markets, with trading continuing in the lower ¥157 range. Dollar buying paused as crude oil prices struggled to gain and US long-term yields lost momentum, while euro-dollar was reported to be finding support around $1.12.
In European market trading, dollar-yen was subdued, with the trading range remaining broadly flat around the mid-¥157 level. While monitoring recent foreign-exchange trends, market participants judge that the momentum for buying back has weakened. Against a backdrop of sluggish crude oil prices and waning US long-term yields, expectations spread that the dollar's upside was being capped.
Euro-yen moved in a range from the upper ¥176s to the lower ¥177s, while euro-dollar was reported to have moved narrowly within a range of $1.1204 to $1.1229. Factors pointing to a weaker dollar are once again coming into focus, but conditions have not led to rapid fluctuations. Market participants believe that trends in interest-rate differentials and crude oil prices will provide clues to the next phase.
The rebound in cross-yen pairs has been limited, and dollar-yen is expected to remain under restrained upward pressure. Small fluctuations within the current range may become the focus of the market going forward. With no rush to make investment decisions, attention is turning to economic indicators for 07–08 and central bank comments, according to reports.