In today’s New York market, USD/JPY is expected to be driven by the US 10-year Treasury auction and upcoming CPI and FOMC events. Views that the market is experiencing a calm before the storm have emerged, and an expected trading range has also been indicated.
In today’s New York FX market, USD/JPY is expected to move in response to developments in the US 10-year Treasury auction. Going forward, the focus will be on the August CPI release due on the 11th and the FOMC meeting on the 15th-16th.
Comments by Treasury Secretary Bessent are drawing market attention as one factor that could influence the yen exchange rate. In the US bond market, increased issuance of corporate bonds and Treasuries, along with expanded Treasury buybacks by the US Treasury, is scheduled to begin on 10 September, and the market could react depending on developments.
Views that the market is experiencing a calm before the storm have emerged. The US 10-year Treasury yield fell from the 4.70% range to the 4.60% range before rising back to the 4.80% range. It has been trading at levels that bring the 5% range into view.
As US debt outstanding exceeds $40 trillion and interest payments reach the $1 trillion range, concerns are growing over the shift from low-interest debt to high-interest debt and a reassessment of overseas assets. The probability of a 0.25% increase in the federal funds rate at next week’s FOMC meeting is rising, and selling in the US Treasury market could lead even if the slowdown in CPI growth is sustained.
The indicated expected range for USD/JPY is ¥154.42 on the upside and ¥152.10 on the downside.