The yen traded in the low ¥159 range in New York after U.S. PCE inflation came in above expectations. Strong durable goods orders and revised GDP data were also released, as market participants assessed the outlook.
In the New York foreign exchange market on the afternoon of the 26th, the yen traded in the low ¥159 range against the dollar, at ¥159.20–30 as of 9 a.m., representing a slight yen decline and dollar rise from the previous day. Early in the session, U.S. crude oil futures fell to the $80 range against the backdrop of remarks by a senior U.S. official that there would be no U.S. military attack on Iran for the time being. Yen buying and dollar selling were somewhat dominant in overseas markets, after which trading in New York opened at around ¥159.08.
The July PCE price index released at the same time rose 3.7% year on year on a headline basis, exceeding the 3.6% forecast. The core index rose 3.3%, in line with expectations. The index excluding energy and food was unchanged from the previous month.
July durable goods orders rose 1.1% from the previous month, exceeding the forecast 0.5% increase. Revised real GDP for the April–June quarter showed an annualized 1.5% increase from the previous quarter, unchanged from the preliminary figure. Following the releases, the market briefly reached the ¥158 range before moving toward dollar buying and yen selling as investors assessed movements in long-term U.S. Treasury yields.
Market participants said the upside surprise in PCE would not immediately translate into a Federal Reserve policy decision, while some also said the strength of durable goods pointed to resilience in the U.S. economy. Attention is expected to shift to upcoming U.S. economic meetings and additional data, and the foreign exchange market is likely to remain focused on movements in the dollar and yen.