The yen traded in the upper ¥158 range in the Tokyo market on the 11th. While the upside in rate-hike expectations strengthened following a stronger-than-expected US CPI reading, concerns about intervention by the government and the Bank of Japan also spread, capping gains.
In the Tokyo foreign exchange market on the 11th, the yen traded mainly in the upper ¥158 range against the dollar, with the dollar/yen around ¥158.81 as of 15:00. The dollar was up 81 sen against the yen from the previous day, and dollar buying by importers at times pushed the pair up to around ¥158.95, but moves above the ¥159 level were limited.
US October CPI exceeded market expectations, strengthening expectations of an additional FRB rate hike in December. Against this backdrop, US long-term interest rates rose, pushing the dollar/yen up from the upper ¥157 range to the mid-¥158 range. The euro/yen weakened to around ¥177.23, while the euro/dollar softened to around $1.1160.
Around 17:00, the dollar's downside remained firm, and episodes of yen selling continued to lead the market against the backdrop of a widening US-Japan interest-rate differential. Some market participants said that a move toward the ¥159 range would heighten concerns about intervention by the government and the Bank of Japan.
The focus going forward will be the course of rate-hike expectations ahead of the December FOMC and developments in intervention concerns. With US PPI and AI-related factors emerging, the market is expected to see an interplay between moves surrounding consolidation in the ¥159 range and intervention concerns.