USD/JPY is expected to lack direction on 8 October, with fluctuations in oil prices and movements in Japanese and US long-term interest rates the market's main focus. Developments in the situation in the Middle East and US policy factors may also have an impact.
In the New York market on the 7th, USD/JPY rose to ¥158.40 before falling back to ¥157.90 and closing at ¥158.09. Oil prices rose against a backdrop of continued Iranian attacks on vessels in the Strait of Hormuz and an intensification of the Russia-Ukraine war, but subsequently turned lower. In the bond market, long-term interest rates had been rising, but movements emerged in tandem with oil prices.
USD/JPY is also expected to lack direction today, the 8th. While strong demand at the US 10-year Treasury auction is pushing yields lower and weighing on the dollar, the minutes of the FOMC meeting held in September were viewed as hawkish, supporting persistent dollar buying on the Japan-US interest-rate differential. Selling pressure on the yen remains ahead of the Bank of Japan's meeting this month, but concerns about foreign-exchange intervention in the ¥158 range could weigh on the currency pair and limit its movement.