This week, USD/JPY has been trading mainly in the ¥153 range, with the focus on whether it will break out toward around ¥154. With the ECB Governing Council meeting and the release of U.S. PPI due today, interest-rate trends and movements in the dollar will be the market's main focus.
In this week's foreign exchange market, USD/JPY has been trading mainly from the upper ¥152 range to the ¥153 range, with markets continuing to wait for a move out of the range in either direction.
While adjustment pressure on yen carry trades has intensified, the rapid yen appreciation trend has paused, and there have also been instances of localized buying to cover short positions.
Overseas markets are focused on the ECB Governing Council meeting and U.S. PPI. The ECB is expected to implement the rate hike this time, while its stance on signaling the pace of future rate hikes will be closely watched. USD/JPY is expected to be affected through movements in EUR/USD and EUR/JPY.
U.S. PPI is expected to show strong year-on-year growth, potentially indicating persistent inflation. Depending on the deviation from market expectations, U.S. Treasury yields and the dollar are expected to move.
Heightened tensions in the Middle East and crude oil trends also remain risks to watch, and NY crude oil is expected to stay at elevated levels. These factors, together with the ECB Governing Council meeting and the release of U.S. PPI, are expected to influence the market's reaction going forward.