USD/JPY held in the upper ¥157 range in the Tokyo market. Real-demand buying ahead of month-end, higher crude oil prices and rising US long-term interest rates supported the market, which was trading around ¥157.67–¥157.68 at noon.
In the Tokyo foreign exchange market on the morning of the 28th, USD/JPY held in the upper ¥157 range. Although it briefly fell below ¥157 in overseas trading at the end of the previous week, buying by real-demand participants ahead of month-end, higher crude oil prices in after-hours trading and rising US long-term interest rates provided support in the Tokyo market at the start of the week. At noon, it was trading at ¥157.67–¥157.68, with the dollar weaker and the yen stronger than at 5 p.m. the previous Friday.
In overseas trading over the weekend, remarks by Finance Minister Katayama (片山) were viewed as a factor prompting dollar selling, and USD/JPY briefly fell below ¥157 early in US trading. It subsequently held up as US long-term interest rates remained elevated, then moved sideways in a range around ¥157.00–¥157.30 from the middle of the session onward, ending late trading in the ¥157.20 range.
Buying back led trading in Tokyo on Monday, and USD/JPY briefly rose to the ¥157.60 range in the early morning. From 9 a.m., substantial buying by real-demand participants ahead of month-end was observed, and the dollar recovered to the ¥157.80 range around the reference rate fixing. Toward noon, the market came under some pressure from selling into the rebound.
Market participants said that higher crude oil prices in after-hours trading and rising US long-term interest rates prompted buying of USD/JPY. Others said that the yen's weakness being raised as an issue at the Japan-US summit could cap gains. Expectations of dollar selling and buying by domestic importers also capped the yen's gains, while the view that higher crude oil prices would worsen Japan's terms of trade was seen as another burden on the yen. The reference ranges at noon were USD/JPY ¥157.17–¥157.86, EUR/USD $1.1374–$1.1395 and EUR/JPY ¥178.85–¥179.73.
The euro also maintained a tendency to sell the yen, trading at ¥179.57–¥179.58 per euro at noon, down approximately ¥0.49 from the previous weekend, with the euro weaker and the yen stronger. EUR/USD was trading at $1.1388–$1.1389 per euro, as the market shifted from dollar-led moves in the morning to yen-led trading.