Dollar-yen rose to the ¥158 range in the New York morning before correcting to the ¥157 range by the Tokyo morning. With trading aimed at the Japan-US interest-rate differential intersecting, warnings against yen depreciation are capping the upside. Attention is focused on developments against the backdrop of remarks by the Minister of Finance and the Governor of the Bank of Japan at 15:00 and other factors.
Dollar-yen rose to around ¥158.30 in yesterday's New York morning, but then gradually corrected and was trading in the ¥157 range by the Tokyo morning. Developments in the Japan-US interest-rate differential and remarks warning against yen depreciation are driving short-term price movements.
Although expectations for a rate hike by the US FOMC have receded, expectations remain strong that rates will be raised in December, and the view that the Japan-US interest-rate differential will not narrow is supporting the dollar. Uncertainty surrounding the situation in the Middle East, higher oil prices and the upward trend in US Treasury yields are also supporting dollar strength.
At the same time, the stance of Japanese and US monetary authorities in warning against yen depreciation is weighing on the upside, and some believe that the possibility of actual intervention will be raised if the yen moves into the ¥159 range. The Minister of Finance and the Governor of the Bank of Japan will deliver speeches at today's National Securities Convention, and their subsequent remarks could affect the market.
Looking ahead, many expect dollar-yen to trade mainly in the upper ¥157 to mid-¥158 range. Caution remains over moves to chase the upside, and the direction of the market is likely to depend on remarks from the Bank of Japan and the Ministry of Finance, as well as US interest-rate developments.