Against a backdrop of stronger-than-expected US economic data and hawkish comments from Fed officials, USD/JPY is once again testing higher levels. While caution over intervention is increasing, market focus is on its movement toward the ¥160 area.
In the New York foreign exchange market on the 10th, USD/JPY rose from ¥158.14 to ¥158.85 and closed at ¥158.74. Weekly US ADP employment and October CPI exceeded expectations, while hawkish comments from Fed Governor Waller and Dallas Fed President Logan pushed up long-term yields and accelerated dollar buying.
On 11 November, expectations are growing that USD/JPY will remain firm. The stronger-than-expected October US CPI and comments from Fed officials have further strengthened expectations for a December rate hike. Buying focused on the widening Japan-US yield gap is providing support, and after breaking above its 200-day moving average, USD/JPY is in a position to test higher levels.
However, as the dollar approaches ¥160, concern over government intervention is expected to increase, potentially weighing on its upside. The Japanese government's release of details of its summer yen-buying intervention has also heightened intervention concerns, and ¥160 is attracting market attention as a defense line.
Market participants continue to hold a strong range-bound view, with trading often expected to remain within the ¥157-¥159 range.