In the New York market at the start of the week, the yen moved to around ¥159 per dollar, while the effect of the yen appreciation temporarily brought about by coordinated intervention by the Japanese and U.S. governments remained at about half. Rising uncertainty over the Middle East situation, higher oil prices and expectations of a Fed rate hike are working as factors driving yen depreciation.
In the New York foreign exchange market at 5 p.m. at the start of the week, the yen was trading at ¥159.26–¥159.36 per dollar, weaker against the previous weekend. Coordinated intervention by the Japanese and U.S. governments, which began on 30 July, temporarily encouraged yen appreciation, but did not go far enough to halt the underlying factors, and its effect has largely been reduced by about half.
Against this backdrop, uncertainty over the Middle East situation has intensified and crude oil futures prices rose on 10 August. Expectations remain strong that the Federal Reserve Board (FRB) will raise interest rates in September, and yen selling and dollar buying based on the Japan-U.S. interest-rate differential have prevailed.
Going forward, the sustainability of the intervention, movements in the interest-rate differential and fluctuations in oil prices are expected to continue affecting market developments. The text contains limited numerical clues, and further official announcements and reports on market developments are awaited.