Dollar/yen is expected to remain somewhat capped today as well. Developments at the G20 meeting of finance ministers and central bank governors and the release of US indicators will be the market's focus.
Dollar strength continued in the Tokyo market yesterday, with dollar/yen briefly rising to around ¥160. Subsequently, yen strength and dollar weakness prevailed, and the pair settled into range-bound trading in the upper ¥159 range. Remarks by the US Treasury Secretary in an interview with a news agency that he hoped for a decision by the Governor of the Bank of Japan were seen as a market factor, prompting yen buying.
Dollar/yen is expected to trade mainly in the upper ¥159 range today. In addition to the G20 meeting of finance ministers and central bank governors, a meeting of the Japanese and US finance ministers is scheduled. The focus will be on whether a stance of coordinated Japanese-US intervention is signaled.
This week marks the start of US jobs report week, with the August ISM Manufacturing PMI and July JOLTS job openings scheduled for release at 11 p.m. The ISM is expected to moderate slightly from its previous high level, but remain relatively strong, while JOLTS is expected to show job openings weaker than the previous estimate. Dollar/yen could be influenced by the results. The euro recovered to the ¥1.16 range against the dollar as the dollar weakened, while euro/yen briefly reached the ¥184 range before falling again, suggesting that dollar-led trading is likely to continue.