The dollar-yen pair is expected to trade nervously next week, with monetary policy meetings in Japan, the US and Europe approaching and uncertainty surrounding the outlook for the pace of rate hikes and geopolitical risks.
The Federal Open Market Committee (FOMC) and the Bank of Japan’s monetary policy meeting (BoJ) are scheduled for next week, and policy rates are widely expected to remain unchanged. The market’s focus is expected to shift to the outlook for a rate hike at the December meeting, with developments in the long-term interest-rate differential between Japan and the US drawing attention.
Regarding the FOMC, Governors Waller and President Williams, among others, are reportedly supporting a decision to leave rates unchanged. The market is preparing to assess whether there will be hawkish debate and the outlook for the December meeting while pricing in a decision to hold rates steady. The Bank of Japan is also expected to maintain the status quo, although expectations have emerged that it may raise its inflation outlook for fiscal 2027.