With markets closed for Silver Week this week, USD/JPY remains firm, trading mainly in the 157 range. The impact of lower oil prices has been limited, and the steady continuation of dollar buying pressure is expected to persist.
With the Tokyo market closed this week, liquidity has declined, while USD/JPY has been trading mainly in the 157 range. Although the market remains sensitive to developments in oil prices, the gradual move toward 158 is continuing.
In the foreign exchange market, concerns over rate checks and intervention by the government and the Bank of Japan mean that yen selling and dollar buying are expected to proceed cautiously. Political developments related to the United Nations General Assembly will also be in focus this week, while the impact of the U.S. presidential election and developments in the Middle East are attracting market attention.
There is a view that the hawkish stance of the U.S. FOMC and expectations surrounding the Bank of Japan's policy management remain a persistent source of dollar-buying pressure. Differences in economic sentiment among European countries, particularly as reflected in the preliminary PMI figures scheduled for release, could trigger short-term market reactions.
Economic events will continue from today onward, including U.S. energy indicators, bond auctions and the release of the OECD outlook. The market broadly shares the view that dollar-buying pressure will continue.