Gaika dot com’s morning dollar-yen forecast indicated a range of ¥157.600–¥159.200 ahead of the release of the U.S. September CPI. Dollar-yen is also expected to test the ¥159 range depending on long-term U.S. interest-rate movements, while expectations for additional rate hikes by the U.S. Federal Reserve are priced into the market.
Looking back at the previous day’s trading, dollar-yen fell approximately 0.2% on a closing-price basis. The pair was affected by movements in long-term U.S. interest rates ahead of the release of the U.S. September CPI. The market is pricing in a greater than 20% chance of an October rate hike and a less than 90% chance of a December hike.
The U.S. September CPI due for release today is expected to rise 3.6% year on year, while core CPI is expected to rise 2.5%, accelerating from the previous month. The focus is on whether inflation will spread to goods and services excluding energy.
Some Fed officials have expressed views acknowledging the possibility of an additional rate hike this year, but views opposing consecutive rate hikes have also been voiced. The market believes that dollar movements will depend on interest-rate trends while taking this into account.
The morning dollar-yen forecast range is ¥157.600–¥159.200, and the pair may test the ¥159 range if long-term U.S. interest rates rise again.