U.S. August CPI rose in line with market expectations, providing no conclusive evidence of accelerating inflation. With the FOMC scheduled for 12 September, markets are maintaining a wait-and-see stance, and dollar/yen is expected to remain mainly in a range from the upper ¥152s to the lower ¥154s.
U.S. August consumer price index (CPI) rose 0.4% month on month, in line with market expectations, while core CPI rose 0.3%, exceeding expectations. As a result, the headline year-on-year rate was 3.4% and the core rate was 2.4%, but the data did not provide fresh strong evidence of accelerating inflation.
Following the release, the probability priced into the U.S. interest-rate futures market for a September rate hike increased, with the probability of a 0.25 percentage-point hike rising from approximately 72% to 87%. Markets are cautiously assessing developments ahead of the FOMC meeting on 15–16 September.
For dollar/yen, range-bound trading is expected to continue. The pair fell 0.6% based on the previous day's closing price, but concerns about a move toward higher levels remain, partly due to the impact of higher oil prices. The range is expected to be broadly from the upper ¥152s to the lower ¥154s.
The focus going forward will be the FOMC decision and developments at the Bank of Japan. As the market enters a period with multiple events, the foreign exchange market may react sensitively to new information on interest rates and price indicators in both countries.