Dollar-yen is expected to focus on whether it can reach ¥160 next week. U.S. jobs data and concerns over intervention by the Japanese and U.S. governments are reportedly expected to drive price movements.
Dollar-yen briefly rose to the ¥159 range on the 24th, but yen buying gained the upper hand on the 25th, sending the pair back below ¥158. The view has been expressed that comments from government officials, together with concerns over intervention, curbed market movements.
In comments from the Bank of Japan and the finance authorities, Economic Revitalization Minister Kiuchi Minoru (城内 実) said that this is not a phase for pursuing reflationary policies such as monetary easing, while Finance Minister Katayama Satsuki (片山 さつき) said that she is maintaining close contact with U.S. Treasury Secretary Scott Bessent on matters including foreign exchange. Reports that concerns over the weak yen were raised at the Japan-U.S. summit were also cited as a factor behind stronger yen buying.
On the fundamentals, the U.S. FOMC raised interest rates and signaled an additional hike later this year, while the Bank of Japan also raised rates, although some members opposed the decision. The direction of monetary policy therefore remains under scrutiny, which is seen as underpinning the pair's firm price action.
Technically, after breaking above the 200-day moving average on a daily basis, dollar-yen may continue to trade back below it. Support around ¥157 and ¥156.50 is expected to help contain downside, while a renewed break above ¥159 could bring the low ¥160s within reach.
Key events next week include the Bank of Japan's Tankan survey, the release of the Summary of Opinions from its monetary policy meeting, and U.S. jobs data. The market is expected to continue pricing in rate-hike expectations for October and December depending on the U.S. jobs data, while dollar-yen may continue to seek direction around ¥158.