Dollar-yen in the New York market is expected to trade in a range around ¥158. October US CPI and remarks by senior Federal Reserve officials will be the focus, with market participants expected to look for signals for the next move.
Dollar-yen is expected to trade in a range centered on ¥158 during New York hours. With the effects of developments in monetary policy in Europe and the United States and geopolitical risks intersecting, short-term volatility may emerge around the release of US CPI.
The US consumer price index (CPI) for October, due to be released today, is expected to show a 0.3% month-on-month rise in the headline index and a 0.2% rise in core CPI. While lower gasoline prices are expected to weigh on the headline figure, inflationary pressure is expected to remain persistent because of services prices and tariffs.
Regarding US interest rates, remarks by Federal Reserve Governor Waller have prompted some to say that the possibility of an additional rate hike in December cannot be ruled out. This could support dollar buying. At the same time, some expect hopes for easing tensions in the Middle East to cap the dollar’s upside.
On the yen side, expectations of an additional Bank of Japan rate hike are increasing, although some caution remains over the policy decision. A period in which the gap between the BoJ’s lack of momentum and expectations for US rate cuts narrows is also possible, and the market is expected to test the upper ¥158 range.