The US dollar/yen is widely expected to trade in a range from the upper ¥156s to around ¥159 this week, with concerns about intervention potentially intensifying above ¥159. This article summarises the forecast based on last week's movements and the expected direction of upcoming indicators. The figures in the article include forecasts and do not represent definitive investment advice.
Last week, equity markets swung sharply against the backdrop of the US midterm election results, while crude oil prices at one point plunged. Interest rates continued to trend lower, prompting investors to hold back from buying US dollars and leading to a weaker dollar and stronger yen. At the same time, the US October employment report exceeded market expectations, and the US dollar traded around the mid-¥158s.
After the midterm elections, AI-related stocks, including SOX constituents, continued to decline, while the Nikkei 225 and Nasdaq also fell. As equity-market turmoil coincided with continued declines in interest rates, investors increasingly moved funds into safe-haven assets. This has also brought changes to the supply-and-demand structure for the US dollar.
CPI and PPI data are due this week, and the US dollar is expected to rise at times on the strength of the employment report. On the other hand, concerns about intervention by Japan and the United States are increasing, and some believe caution is warranted over moves above ¥159. Speculative net buying of US dollars is expected to continue contracting, which could create a factor weighing on the dollar in the foreign exchange market.
This week's forecast range is ¥156–¥159.5, and concerns about intervention could intensify when the rate exceeds ¥159. Depending on the results of indicators such as NFP, the exchange rate could also move outside this range, so attention is focused on the latest economic data releases.