USD/JPY reached a 50% retracement following the previous day’s intervention turmoil, with the next upside target seen in the mid-¥160s. 外為どっとコム projects a range of ¥158.6–¥160.2 for today, with the market expected to test the key ¥160 level.
In its 13 August foreign-exchange market commentary, 外為どっとコム noted that USD/JPY was trading in the low ¥159s following the previous day’s moves and had partially recovered the 50% retracement level of ¥159.48. Against this backdrop, the mid-¥160s was cited as the next upside target. Despite growing expectations of a narrowing Japan-U.S. interest-rate differential, demand for the dollar remains firm, and many market participants believe the impact of intervention was limited.
The expected main range for USD/JPY is ¥158.6 to ¥160.2. In addition to the intervention stance of the Japanese and U.S. authorities, the market may move depending on interest-rate and inflation data released from 16○ onward. Today’s range assumes a situation in which attempts to gauge the dollar’s rebound intersect with factors measuring the yen’s resilience.
The report identifies U.S. economic indicators, including CPI, the producer price index and employment-related data, as well as monetary-policy developments at the Bank of Japan and the Federal Reserve and the possibility of market intervention, as the key points of focus for USD/JPY. Market participants believe the pace of CPI growth and energy-price trends will influence USD/JPY’s short-term direction.
The schedule of key economic indicators and events for 13 August includes U.S. CPI and PPI, initial jobless claims and a long-term interest-rate auction. Depending on these data and the policy stance of the authorities, USD/JPY volatility may rise again.