USD/JPY edged higher in Tokyo trading on the morning of the 13th against a backdrop of higher crude oil prices. Market attention is focused on heightened tensions in the Middle East and the scheduled release of US CPI.
In Tokyo foreign exchange trading on the morning of the 13th, USD/JPY was quoted around the mid-¥158 range, up approximately 20 sen in dollar terms and down in yen terms from the previous weekend. Around 9:00 a.m., the pair was in the ¥158.52-¥158.53 range.
During European and US trading on the previous weekend, the pair broke out of a range around the lower half of the ¥158 level and edged higher as crude oil futures continued to rise, reaching the mid-¥158 range when European traders began trading. It was also reported to have temporarily risen to around ¥158.75 shortly before 9:00 a.m.
In the Middle East, the Houthis, an Iran-aligned militant group in Yemen, attacked the international airport in Riyadh, the capital of Saudi Arabia, causing casualties, including Americans. Crude oil futures remained near their highs in response, and some market participants said that “safe-haven dollar buying had strengthened.” The euro fell against both the yen and the dollar, providing another source of support for the dollar.
Meanwhile, the US Consumer Price Index (CPI) is scheduled for release on the 14th, and some market participants believe that a wait-and-see mood is prevailing. Statements by Japanese officials discouraging further yen weakness are also being watched, and upside is considered limited. The Bank of Japan released the September corporate goods price index shortly before 9:00 a.m., but the market reaction was limited.