The yen is expected to rise against the dollar next week. A decline in U.S. markets, driven by excessive concerns over AI investment, could prompt buying of safe-haven bonds and support further yen appreciation.
Risk-off conditions are expected to intensify in the yen market next week, with yen buying and dollar selling likely to emerge amid concerns over a decline in U.S. equities. As caution over excessive investment related to AI increases, the bond market could outperform relatively and lower interest rates could support further yen appreciation. In addition, remarks by leaders of various countries during the period of monetary policy decisions known as central bank week could contribute to market volatility, making them a focus of attention.
Depending on the earnings results of major U.S. technology companies, the yen could strengthen past ¥155. Corporate earnings will influence market risk appetite, and a short-term move toward yen strength could intensify depending on developments in U.S. markets.
Ahead of central bank week, the monetary policy decisions of the Federal Reserve, the Bank of Japan and the ECB, along with remarks by their leaders, have been cited as factors that could drive volatility in the foreign exchange market. Investors are therefore expected to watch for signs of each country’s policy stance.