The morning outlook for USD/JPY focuses on the ISM manufacturing data against a backdrop of expectations for a December Fed rate hike. The view is that a breakout from the current range is unlikely.
USD/JPY is expected to remain in the upper ¥156 range, with this morning's projected range said to be ¥156.700 to ¥158.200. Amid falling Japanese and U.S. stock futures and safe-haven yen buying, trading is expected to remain concentrated within the range.
In the previous day's trading, USD/JPY fell about 0.1% and recovered after declining to around ¥156.95. The Bank of Japan left its policy rate unchanged at 1.25% at its monetary policy meeting, but Governor Ueda pointed to upside risks to the inflation outlook and suggested the possibility of a December rate hike.
The U.S. economic indicator attracting attention today is the ISM Manufacturing Index, which is closely watched as an input for assessing the policy decision at the December FOMC meeting. Trading is expected to continue as the market seeks clues to the dollar's direction.
The U.S. midterm elections and employment data are also due this week, making this a period of consecutive important indicators, but USD/JPY is viewed as unlikely to move sharply in one direction.