In the New York market on the 1st, dollar/yen fell to ¥157.23 before rising to ¥158.25 and closing at ¥158.05. Dollar buying may continue on the back of higher oil prices, movements in the U.S. interest-rate differential and a resilient labor market. Intervention concerns remain strong.
In the New York foreign-exchange market on the 1st, dollar/yen fell to ¥157.23 before rising to ¥158.25 and ending trading at ¥158.05. The market was characterized by a mix of concerns about intervention to correct yen depreciation and factors supporting dollar buying.
Oil prices have risen against the backdrop of escalating tensions in the Middle East, creating conditions in which U.S. inflationary pressures are likely to draw attention. Dollar buying based on the U.S.-Japan interest-rate differential is believed to remain firm.
As an indicator of the resilience of the U.S. labor market, U.S. initial jobless claims fell below market expectations, while prices in the September ISM Manufacturing Index were reported to have risen.
Reports that Federal Reserve Vice Chair Jefferson suggested keeping interest rates unchanged occasionally provided a reason for dollar buying to pause, and continued attention is expected to be paid to comments from Fed officials. With selling pressure on the yen from concerns about worsening Japanese fiscal conditions also remaining, the tug-of-war between intervention concerns, interest-rate differentials and higher oil prices is expected to continue.