Attention is focused on intervention concerns following the Bank of Japan's rate check and remarks from senior US Federal Reserve officials, with USD/JPY potentially moving toward ¥159 tonight. The projected range during European and US trading hours is 157.200-159.000, and price action is expected to change materially depending on tonight's catalysts.
The projected USD/JPY range for European and US markets is 157.200-159.000. In the Tokyo market, the pair held firm in the upper ¥157 range before moving toward ¥158. It strengthened to around ¥158.37 early in the session, then fell back temporarily to around ¥157.79 amid intervention concerns, but the downside was limited and it has recovered to the ¥158 range again.
In the outlook for overseas markets, the pair has moved above the level at which the Bank of Japan conducted a rate check on the 18th, prompting caution about further upside amid intervention concerns. Several senior US Federal Reserve officials are scheduled to speak tonight, and the market is said to be pricing in an over 80% chance of a rate hike at the October meeting. Depending on their remarks, USD/JPY could move with ¥159 in sight.
Tonight's events include speeches by central bank officials and representatives of institutions in various countries, as well as the release of US economic indicators. The key factors will be remarks from Fed officials and changes in the market's rate-hike expectations. Particular attention is being paid to catalysts marked with a star, as the market assesses whether they could become a turning point.
Intervention concerns involving the Bank of Japan and remarks related to the Fed are among the factors likely to determine USD/JPY's short-term direction, with a move toward ¥159 envisaged. Depending on tonight's catalysts, the pair may continue to fluctuate within the ¥158 range.