The yen is flat in the low ¥156 range, with buying and selling mixed ahead of next week’s FOMC and Bank of Japan policy meeting. Buying is expected to dominate in bonds, sending yields lower.
Ahead of the U.S. Federal Open Market Committee (FOMC) meeting and the Bank of Japan’s monetary policy meeting in September, the yen is trading in the low ¥156 range as investors engage in mixed buying and selling. Bonds are expected to rise, carrying over the market tone from the end of last week.
Ueda Marito (上田真理人), president of SBI FXトレード, said he did not believe the U.S. employment report was strong enough to determine a September rate hike. He also said the yen could break through the ¥155 level if the Bank of Japan sends a message suggesting a rate hike in September. At present, however, there is a lack of catalysts for further yen buying, and the yen is expected to remain range-bound this week.
Goto Yujiro (後藤祐二朗), chief currency strategist at Nomura Securities, said the dollar had been bought after the U.S. employment report, but that its upside against the yen remained limited. He noted that, with U.S. stock and bond markets closed on the 7th for Labor Day, dollar-yen trading was likely to show pronounced resistance around ¥156.
Bonds are expected to rise, with the market continuing the tone from the end of last week, when buying was concentrated in super-long-term bonds. Rising expectations for a Bank of Japan rate hike, expectations of fiscal expansion and speculation that the Government Pension Investment Fund (GPIF) will increase its purchases of Japanese government bonds were cited as supporting factors. The September contract, the benchmark month, rose in overnight futures trading, while the U.S. 10-year Treasury yield on the 4th was said to be around 4.78%.