Dollar-yen is expected to struggle to gain ground in European and US FX markets on the 7th. A hawkish tone in the FOMC minutes would make dollar buying more likely, but persistent concerns over coordinated intervention by Japan and the United States are expected to keep the pace of gains moderate.
In the outlook for European and US markets from the 7th onward, dollar-yen is expected to struggle to gain ground. If the FOMC minutes have a hawkish tone, dollar buying is likely to advance against a backdrop of higher US interest rates.
Crude oil prices softened the previous day, with WTI falling into the $87-per-barrel range. Lower oil prices are easing inflationary pressure and limiting gains in long-term US yields.
Meanwhile, risk aversion, including concerns over French public finances, remains, while dollar selling is limited. Euro-dollar has softened from the $1.1270 range to the $1.1240 range, and dollar-yen may at times recover toward ¥158, although gains are likely to be uneven.
In Asian markets, views are spreading that the Bank of Japan’s tightening will be cautious, and dollar-yen may at times rise toward the mid-¥158 range led by yen selling. US monetary policy is expected to be a major focus in the market’s subsequent developments.