The dollar-yen rate is expected to rise to the mid-¥157 range, with market attention focused on the direction of policy ahead of the FOMC and the Bank of Japan meeting. European indicators are also being watched as a potential market-moving factor.
According to the foreign-exchange outlook, the dollar-yen rate is expected to rise to the mid-¥157 range, and a senior analyst set a forecast range of ¥156.80 to ¥158.00. The outlook for US and Japanese policy is the backdrop, and there is also a view that downside risk will be contained in the upper ¥156 range.
In Tokyo trading on the 26th, Germany’s October Ifo business climate index exceeded market expectations and supported European currencies. The index was 90.2, above the forecast of 89.9, while the expectations index, which indicates the outlook, rose to 91.6. The market consequently anticipated a continued economic recovery.
The focus this week is on the US FOMC on the 27th and 28th and the Bank of Japan meeting on the 29th and 30th. Both meetings are widely expected to leave interest rates unchanged, shifting market attention to hints in the statements and press conferences about the timing and pace of future rate hikes. The market is expected to remain cautious.
In indicators released at the end of the previous week, Japan’s September CPI rose 2.1% year on year on a core basis excluding fresh food, while core-core CPI rose 2.4%, exceeding expectations. In the US, the October PMI readings were mixed, with manufacturing at 56.0 and services at 57.9. In Europe, Moody’s maintained France’s rating at Aa3 with a negative outlook.