Dollar-yen is expected to approach ¥160 in European and U.S. markets on the 13th, despite struggling for further gains. Concerns over intervention are expected to intensify around the psychologically important ¥160 level. The pair's movements could change depending on upcoming economic indicators.
Dollar-yen is expected to struggle for further gains in overseas foreign-exchange markets on the 13th. If the U.S. inflation data due tonight is firm, dollar buying is expected to lead in anticipation of near-term tighter monetary policy. However, as the pair approaches the psychologically important ¥160 level, concerns over foreign-exchange intervention are likely to further cap its upside.
Although U.S. CPI released the previous day slowed year on year, it was in line with forecasts for an acceleration month on month. With crude oil prices likely to remain high amid the prolonged turmoil in the Middle East, expectations for tighter monetary policy are likely to spread. U.S. interest rates moved slightly higher and dollar buying continued. Euro-dollar softened from the $1.1560s to the $1.1510s, while dollar-yen rose from the ¥158.60s to the ¥159.50s.
U.S. inflation is expected to remain the focus of overseas markets later today. The producer price index (PPI) due tonight is expected to slow year on year, while accelerating month on month. If it provides support for expectations of an early rate hike by the Federal Reserve, dollar buying could advance as long-term interest rates rise. Meanwhile, yen selling on concerns over Japan's fiscal position is pronounced, but as the pair approaches ¥160, concerns over foreign-exchange intervention could intensify again.