The dollar-yen pair remained soft in the low ¥157 range in the Tokyo market as attention focused on diminishing expectations for further rate hikes following the Fed chair's speech. The pair was seen around ¥157.78 in morning trading before briefly falling to ¥157.70.
In the Tokyo market, the dollar-yen pair remained soft, with the dollar's upside capped as expectations for further Fed rate hikes receded. Market participants are carefully assessing developments regarding the Fed's future rate-hike path.
Market sentiment increasingly held that the Fed chair's speech offered no clear indication of a rate hike at this month's FOMC meeting, limiting momentum for dollar buying. This prompted views that selling pressure on the yen stemming from the US-Japan interest-rate differential had been restrained to some extent.
The dollar-yen pair traded between a low of ¥157.70 and a high of ¥157.97. The euro-yen pair stood at ¥176.87–¥177.25, while the euro-dollar pair was at 1.1195–1.1232. Moves during the morning session remained within a limited range.
The backdrop was uncertainty over the Fed's policy management, and market direction could change depending on upcoming US economic data and comments from Fed officials. Continued yen weakness could provide a tailwind for exporters, while attention is also warranted on the impact on prices of higher import costs.