USD/JPY is expected to remain capped as it approaches ¥160. Against the backdrop of trading in the New York market on the 13th and upcoming U.S. economic data releases, factors restraining a dollar rebound are likely to remain in focus.
In the New York foreign exchange market on the 13th, USD/JPY fell to ¥159.02 before rising to ¥159.57 at the close. The high level of U.S. initial jobless claims for the previous week and the slowdown in the July Producer Price Index from June suggested that the rise in prices had eased, leading expectations for an early rate hike to recede and dollar selling to dominate.
USD/JPY is expected to remain capped today, 14 August. ¥160 to the dollar is viewed as a level at which intervention risks are high, and the dollar’s upside is likely to become increasingly limited as the pair approaches it. At the same time, selling pressure on the yen remains firm amid concerns over Japan’s deteriorating fiscal position and the divergence between Japanese and U.S. monetary policy, making a sharp move toward a stronger dollar and weaker yen unlikely.
Uncertainty surrounding the situation in the Middle East and movements in crude oil prices will remain factors to watch for their potential impact on the market. Following the revised European GDP data, the U.S. July retail sales figures and the preliminary August University of Michigan Consumer Sentiment Index are scheduled for release, and the market could move depending on the results.