USD/JPY and yen crosses edged higher during Asian hours against a backdrop of rising share prices, and the yen is expected to remain on a weakening trend. During the New York and European sessions, a modest risk-on move rather than broad-based dollar buying is expected.
USD/JPY and yen crosses edged higher during Asian hours against a backdrop of rising share prices, while dollar pairs showed a modest move toward dollar weakness. Overall, the view is that price movements will remain limited and modestly tilted toward risk appetite.
While continued gains in share prices are sustaining pressure for yen weakness in USD/JPY, large option positions are concentrated in the New York market, and the move from the lower ¥157s toward the ¥158s is expected to remain limited.
EUR/USD has substantial option interest at 1.1490–1.1500, making gains difficult even as the dollar's recent strength pauses. The decline in crude oil prices has paused, but it has not become a catalyst for major foreign-exchange moves.
A number of data releases are scheduled from the European session onward, including Turkey's consumer confidence index, Taiwan employment data and the eurozone flash consumer confidence reading. None is expected to significantly alter the market's direction, and the market reaction to the data is likely to be temporary. During the New York session, comments from officials, a US 2-year Treasury auction and events related to the UN General Assembly are scheduled, and small headlines may at times generate activity in dollar pairs.
Overall, with share prices rising, crude oil prices stabilizing and the dollar's strength pausing, range-bound, subdued trading is expected to continue during the New York session. Short-term activity may emerge depending on comments from officials and events, but intervention concerns and the impact of option concentrations are expected to make a strongly directional move unlikely.