USD/JPY is expected to test the mid-¥157 range this morning, as the market assesses the impact of the doubling of US Treasury buybacks.
USD/JPY fell approximately 0.9% yesterday on a closing-price basis. The US Treasury announced that it would raise the cap on long-term Treasury buybacks by at least 2 times, triggering a sharp decline in long-term US Treasury yields at one point. This led to periods of dollar weakness and yen strength early this morning, with movement observed toward around ¥158.
The increase in buybacks is seen as aimed at pushing down ultra-long-term interest rates, but some view it as largely a stopgap measure that will not lead to an improvement in the underlying fundamentals. Caution was expressed that movements in US Treasury yields could continue to drive activity in USD/JPY.
Today's USD/JPY forecast range is ¥157.100–158.900, and the outlook is said to depend on whether the decline in US Treasury yields continues. Attention is also focused on oil-price movements in light of the situation in Iran, with volatility in energy markets potentially having an indirect impact.
The full report is stated to be included in 外為どっとコム's report and is provided as part of efforts to understand the outlook for the USD/JPY exchange rate.