Dollar/yen rebounded against a backdrop of high oil prices and reacted to factors surrounding geopolitical risks and the interest-rate outlook. Views that the effect of verbal intervention would be temporary were also reported. This summarizes the key points of the daily FX report for the 28th.
In currency trading on Monday the 28th, dollar/yen temporarily fell to around ¥156.50 before returning to the ¥157 range as US long-term yields rose against a backdrop of high oil prices. The market view was that rising oil prices contributed to dollar strength and yen weakness.
In an interview with Reuters, Finance Minister Mimura said that the Japanese and US governments share the issue of the yen's undervaluation and indicated that the market should take this at face value. He expressed the view that the matter should be addressed appropriately based on discussions between the Japanese and US leaders and finance ministers.
ECB President Lagarde pointed out that rising oil and gas prices were factors pushing up prices, while saying that the outlook for inflation remained highly uncertain. She indicated that a cautious monetary policy response was necessary to contain inflation.
US media reported that there was a willingness to ease sanctions in connection with talks on Iran's nuclear program, but President Trump later denied the reports. The market's areas of focus included expectations for future Fed rate hikes and the release of economic indicators.