Dollar-yen is expected to remain firm in today's New York session, but strong intervention concerns above ¥160 are likely to cap gains.
Dollar-yen came under selling pressure for a correction, falling to the ¥159.50 area earlier today, but dollar buying is expected to provide support in the New York session against the backdrop of US interest rate trends, keeping the pair firm. However, strong intervention concerns above ¥160 are expected to make it difficult for the pair to extend gains.
As a related factor, expectations for higher US interest rates increased following remarks by Fed Chair Warsh at Jackson Hole, and dollar-yen briefly rose to the ¥160 area. In light of past coordinated intervention, Japan and the United States may maintain their vigilance toward levels above ¥160.
If geopolitical risks surrounding the United States and Iran intensify, crude oil prices are expected to rise and US interest rates to remain elevated, which could support dollar buying. As a result, the dollar may continue to strengthen in today's trading.
The expected range has an upper end of ¥160.20, today's high, with the previous high of ¥160.88 also serving as a reference. On the downside, ¥159.30 and the daily Ichimoku conversion line at ¥159.12 are cited as unchanged reference levels.