USD/JPY rose in the New York market, and oil prices and the US 10-year Treasury yield are expected to continue rising, suggesting a firm Tokyo market. However, concerns over the Bank of Japan selling dollars and buying yen remain high.
In the New York foreign exchange market on the 1st, USD/JPY strengthened to ¥160.27. WTI crude oil futures rose to the mid-$90s, while the US 10-year Treasury yield rose to around 4.798%.
In today's Tokyo foreign exchange market, USD/JPY is expected to remain firm against a backdrop of elevated oil prices and rising US long-term yields, although concerns over Bank of Japan intervention to sell dollars and buy yen remain.
At the meeting between US Treasury Secretary Bessent and Finance Minister Katayama (片山), the two were apparently in agreement that an orderly yen market is essential to financial market stability, and may have confirmed a stance of curbing excessive yen depreciation. The direction of efforts by Japan and the United States to work together to correct yen weakness will be closely watched.
Another focus will be whether Treasury Secretary Bessent should also mention the possibility of intervention in reflationary fiscal policy, in addition to Japan's monetary and foreign-exchange policies. With the US employment report and CPI due to be released around the time of the US FOMC, the market is expected to assess the next direction.