Factors pointing toward yen appreciation have again come into focus amid expectations of a faster pace of BOJ rate hikes and a review of reflationary policy, and USD/JPY has been moving in a 0.wide range. The euro continues to maintain its uptrend, while upcoming US economic data and developments at the BOJ and ECB will be closely watched.
As part of recent fundamental developments, USD/JPY reached a high of 160 yen after a temporary period of yen appreciation in late August, before being pushed back toward 155 yen. Views are strengthening that the pair will generally remain within a range of 155 to 160 yen.
USD/JPY's daily chart has shifted to a dead cross, and the short-term downtrend is expected to continue. On a weekly-chart basis, however, the long-term trend remains downward, and whether the pair will break below the 155 yen level will be a key focus going forward.
EUR/USD remains in an uptrend, while EUR/JPY has fallen below its moving average on a weekly basis and is entering its first week of observation. There is a view that the pair is unlikely to be driven by major factors ahead of the ECB Governing Council meeting and Japanese and US monetary policy decisions.
Key events this week include the market's reaction to the US CPI release on 11 September and the FOMC meeting on 14 September, as well as developments ahead of the BOJ meeting. Market participants are seeking to assess market direction primarily by monitoring US economic data and central bank developments.
Overall, the yen exchange rate has been centered around 155 yen, but many expect another major move to depend on the outcomes of the CPI release, FOMC meeting and BOJ meeting. The euro could move depending on developments at the ECB, although its uptrend is continuing for now.