In Western FX markets on the 12th, the dollar-yen pair is expected to struggle to rise, while the momentum behind dollar buying is likely to continue. However, concern over coordinated intervention by Japan and the US around the ¥160 level could limit gains.
In Western markets on the 12th, the dollar-yen pair is expected to move from the latter half of the ¥159 range toward ¥160, while euro-dollar has moved from around $1.1140 to below $1.10. The backdrop is the view that dollar-buying pressure will continue amid expectations for tighter US monetary policy and the absence of dovish views from Federal Reserve officials.
The upside surprise in the US Consumer Price Index (CPI), which exceeded market expectations, and remarks by Fed officials suggesting a tightening stance supported dollar buying. Some markets have also begun pricing in a rate hike of around 0.5%, and expectations have spread that long-term interest rates will remain elevated.
However, concern over coordinated intervention by Japan and the US is intensifying near ¥160, potentially weighing on further gains. The Ministry of Finance is expected to publish its record of large-scale intervention in the July-September quarter this week, raising market awareness of intervention risk.
In overseas markets from today onward, speculation about US monetary policy is expected to continue. Initial jobless claims could show a weaker week-on-week result, and a pause in the momentum behind dollar buying is also possible.