With the FOMC scheduled for the 27th–28th and the Bank of Japan meeting for the 29th–30th this week, wait-and-see sentiment toward USD/JPY is expected to strengthen. However, movements in the Nikkei Average and uncertainty surrounding the situation in the Middle East could also affect the yen.
The dollar/yen pair closed slightly higher on the 23rd, but the yen briefly strengthened to around ¥156 to the dollar following the decline in the Nikkei Average. The decline was subsequently offset as the Nikkei’s losses narrowed and oil prices rose.
With announcements from the FOMC and the Bank of Japan meeting due this week, the market is awaiting clues on the timing and pace of future rate hikes. If concerns over AI investment affect stock prices, dollar selling and yen buying could intensify.
Among the main economic indicators, Japan’s September CPI remained at +2.1% year on year, including +2.1% on a core basis, while core-core CPI came in at +2.4%, above expectations. In Europe, Germany’s manufacturing PMI rose, the UK’s PMIs both increased, and the US manufacturing PMI remained at a high level. Moody’s maintained France’s credit rating at Aa3.