Amid views that the impact of the French riots is limited, the BOJ is unwilling to tolerate further rate hikes, while US September industrial production recorded growth above market expectations. Dollar-yen is expected to continue trading around ¥158.
In the foreign exchange market on the 16th, BOE Governor Bailey indicated that, based on the signs seen so far, the impact of higher energy prices on overall inflation was quite limited, prompting views that the impact of monetary policy was limited. Meanwhile, Fed Chair Warsh indicated that he was not prejudging the outcome of the FOMC, making the outlook for future rate hikes more difficult to assess. BOJ Governor Ueda (植田) said that “further increases cannot be tolerated” and indicated that achieving stability around 2% was a major policy objective. US September industrial production rose 0.7% month on month, exceeding market expectations.
In stock, bond and commodity markets on Friday the 16th, the Nikkei Average rose sharply, while major stock indexes showed mixed performance. Gains in crude oil and gold futures supported markets, while risk factors related to US market developments continued to be monitored. Dollar-yen is expected to continue seeking direction from the upper ¥157s to the lower ¥158s.
The dollar-yen range in foreign exchange order information and today's forecast range is shown as ¥157.300 to ¥158.500, and future movements are considered particularly susceptible to the Fed's stance. Key indicators and events include the release of medium-term GDP and industrial production data, as well as speeches related to the ECB.