In Tokyo FX trading on the 29th, the yen fell for the first time in 3 trading days, with the dollar rising to the low ¥157 range. The yen weakened and the dollar strengthened as higher US long-term yields widened the Japan-US interest-rate differential.
In Tokyo trading on the 29th, the yen fell for the first time in 3 trading days. As of 5:00 p.m., the dollar was at ¥157.37–¥157.41, with the yen weakening by around ¥0.15–¥0.17. The previous day's rise in US long-term yields and focus on a wider Japan-US interest-rate differential prompted yen selling and dollar buying.
The previous day's US long-term yield rose to around 5.27%, while higher oil futures prices also pushed up the dollar. Expectations of additional rate hikes by the FRB supported the dollar, while views persisted that higher oil prices driven by tensions in the Middle East would continue.
Japanese and US finance officials again signaled their stance of restraining yen weakness, and there was a period around noon when yen buying and dollar selling temporarily intensified. In the afternoon, the pair traded in a ¥157.20–¥157.50 range amid a lack of fresh catalysts, with directionless trading continuing.
Market focus shifted to the US Consumer Confidence Index and JOLTS, the Bank of Japan Tankan survey, and the release of the main opinions from the monetary policy meeting. Voices calling for an assessment of the direction of Japanese and US monetary policy spread through the market.