In Tokyo trading on the 10th, dollar-yen remained in a narrow range around ¥158. Investors became increasingly cautious ahead of the US CPI release.
In the Tokyo foreign exchange market on the 10th, dollar-yen rose to around ¥158.10 in morning trading, but gains were capped toward noon, and the pair moved within a narrow range of ¥158.00–¥158.01 in the afternoon. As of 5 p.m., the daily indication was ¥158.00–¥158.01, representing a modest move toward a stronger dollar and weaker yen than at the same time the previous day.
The Bank of Japan’s “Summary of Opinions” from its October Monetary Policy Meeting, released in the morning, included many calls for an early rate hike based on inflation reaching 2%, while more cautious views were also expressed. Overall, the tone was seen as leaning hawkish, although dovish opinions were also evident.
Market attention turned to the US CPI release tonight. Headline CPI is forecast to rise 0.3% month on month, while core CPI is expected to rise 0.2%. The probability of a US rate hike in December is said to be above 80%, and domestic banks expect the market to remain within its current assumed range. European currencies rose against the dollar, with the euro gaining against both the yen and the dollar.
Looking ahead, many market participants expect the currency pair to continue trading within a range centred on ¥158, and are watching the CPI result for clues as to whether expectations for rate hikes in Japan and the US will strengthen.