USD/JPY is expected to trade within a ¥154–¥158 range this week. In addition to the resumption of market operations following Labor Day, US economic data and US-Japan policy developments could determine the market's directional bias.
USD/JPY traded in the week of 31 August last week. After plunging temporarily to around ¥155, prompted by remarks from Fed Chair Warsh, it continued to move around ¥158. Some analysts believe the break below the trading range accelerated the decline.
The narrowing US-Japan interest-rate differential was cited as a factor behind the stronger yen, but the rise in long-term interest rates subsequently paused, with rates showing a relatively downward trend in the latter half of last week.
Long-term interest-rate trends are also influenced by fiscal policy. Treasury Secretary Bessent's remarks expressing expectations that Japan would pursue a stronger-yen policy, along with the Takaichi administration's fiscal policy, attracted market attention.
Trading is expected to become more active this week following Labor Day. USD/JPY is expected to move around ¥158 on the upside and the ¥155 range on the downside, with US economic indicators such as CPI and positioning ahead of the FOMC meeting in focus. The forecast range for this week is ¥154–¥158.