Views have been reported that expectations for a US Fed rate hike have eased somewhat, with USD/JPY expected to remain in a range from the upper ¥156s to around ¥157. Attention is also focused on expectations for consecutive Bank of Japan rate hikes.
The morning USD/JPY outlook reflects views that expectations for a Fed rate hike have declined, presenting a range of ¥156.500 to ¥157.900. The Bank of Japan is scheduled to publish its Tankan survey and the main opinions from its monetary policy meeting, bringing renewed attention to the outlook for consecutive Bank of Japan rate hikes.
In the previous day's review, USD/JPY rose approximately 0.1% on a closing-price basis. It briefly fell to ¥156.38 after the Tokyo fixing, but rebounded to around ¥157.54 toward the end of the New York session. The US August PCE deflator came in below expectations, although some viewed the result as reflecting a revision to the estimation method, limiting its impact on interest rates and foreign exchange.