Dollar-yen has been confined to a range of around ¥157.50–¥159.00, with limited movement in either direction, and range-bound trading has continued ahead of next week's FOMC and Bank of Japan meeting and the US midterm elections.
In the Tokyo market, dollar-yen traded in a range of around ¥157.50–¥159.00, with moves limited on both the upside and downside. In the New York market the previous Friday, the yen temporarily weakened amid rising US long-term yields and higher oil prices, but there was no clear direction and the pair remained within its range.
While expectations are spreading that the Federal Reserve will raise rates in December, expectations for an additional Bank of Japan rate hike and vigilance over intervention by the government and the Bank of Japan are capping the upside. Next week's FOMC and Bank of Japan meeting and the US midterm elections on 3 November are the key focuses.
The New York market close saw dollar-yen trading in the first half to middle of the ¥158 range. US long-term yields rose to around 5.14%, while higher oil prices also supported yen selling. Although rising energy prices are being viewed as a factor driving up import costs, the FX market remains range-bound.
Technically, resistance is seen at ¥158.56, the 200-day moving average, with the recent high at ¥158.95. Support is seen at ¥157.70, the low on the 19th, and ¥156.95, the daily base line, with many expecting trading to continue within the range.