As a series of FRB officials’ remarks are scheduled for 28 September and month-end factors come into play, USD/JPY is seeking direction amid intervention concerns and ahead of the employment report. With the release of the Bank of Japan’s meeting minutes also approaching, the market continues to wait for signals.
In the foreign exchange market on 28 September, the focus will be on the direction of U.S. long-term interest rates, USD/JPY and the euro, as well as month-end and quarter-end factors. With the release of the Bank of Japan’s meeting minutes approaching, remarks by FRB officials are attracting attention as a market cue. The dollar strengthened and the yen weakened at the start of the week, while EUR/USD moved lower.
With important U.S. data releases, including the employment report, PCE deflator and final GDP figures, scheduled for this week, the market is expected to continue looking for clues on FRB monetary policy. Although few new U.S. data releases are scheduled for the 28th itself, remarks by FRB officials are likely to have an especially strong effect on market reactions.
Around the 28th, the Bank of Japan will release the minutes of its 30–31 July monetary policy meeting, and the market will seek to confirm the Bank of Japan’s stance on rate hikes and its view of the currency market. In the United States, remarks are scheduled from FRB Vice Chair Bowman and FRB Governor Cook, while remarks from Richmond Fed President Barkin are also pending. In Europe, remarks by ECB President Lagarde will be closely watched for their potential impact on the euro.
Month-end and quarter-end factors are expected to produce changes in supply-demand flows, and intervention concerns could resurface if USD/JPY approaches ¥160. Although some believe intervention concerns receded after USD/JPY fell at the end of last week, the status of foreign exchange intervention is scheduled to be released on the 30th, bringing renewed attention to whether intervention occurred.
A survey by Gaitame.com shows that individual investors’ expectations for a stronger dollar and weaker yen are increasing. Their USD/JPY forecast for the next month is a high of ¥159.58 and a median of ¥160.00, and a low of ¥153.55 and a median of ¥154.00.