In the Tokyo market, dollar-yen consolidated around the mid-¥157 range, with expectations that speculation over Japanese and US authorities' opposition to yen depreciation would support the downside. With key indicators including the US employment report due ahead, trading is expected to remain range-bound.
In the Tokyo market at the start of the week, dollar-yen is expected to consolidate around the mid-¥157 range, with downside considered limited following its brief move below ¥157 at the end of the previous week. The expected range is ¥156.80 to ¥158.00.
With officials in both Japan and the United States signaling opposition to yen depreciation, upside is likely to be heavy. At the same time, views remain strong that the Bank of Japan is less inclined than the US Federal Reserve to raise rates again soon, making a sharp rise in the yen difficult to envisage.
Key indicators due this week, including the US employment report, are external factors, and caution over foreign-exchange intervention remains strong. Market participants believe intervention risk could become a realistic concern if the dollar moves toward ¥160.
Market participants are divided over the timing of the Bank of Japan's next rate hike. Trading is expected to continue with support in the ¥156 range and resistance in the ¥158 range in focus.