In early NY trading, dollar-yen continues to hold firm in the ¥158 range. The move toward the ¥160 level continues, but trading near the 200-day moving average remains cautious.
In today's foreign exchange market, crude oil prices and US Treasury yields continued to rise, while dollar-yen held firm in the ¥158 range. Trading near the 200-day moving average has been cautious.
Although the current situation continues to be affected by the Japan-US interest-rate differential, expectations for further Fed rate hikes, Bank of Japan monetary policy, and an increase in GPIF's domestic investment allocation have receded, with some observers saying that the appeal of buying yen has diminished. At the same time, others say the risk of official buying intervention is steadily rising.
The spread between 2-year Japanese and US government bond yields is approximately 2.9 percentage points, and the estimated fair value is around ¥141, while the exchange rate is currently in the ¥158 range. The risk of intervention could rise sharply if the interest-rate differential remains unchanged while the yen continues to weaken.
NY market option expiry is seen at ¥159, while ¥160 is regarded as an important psychological level. Attention is expected to remain focused on developments in intervention risk and the interest-rate differential.