USD/JPY broke above its 200-day moving average against a backdrop of heightened tensions in the Middle East, with trading expected to target further upside. This morning's forecast range is ¥158–¥159, while the release of the U.S. CPI is likely to influence the market's direction.
Yesterday, safe-haven dollar buying led USD/JPY higher, with market participants focused on moves by the Houthis, who attacked an airport in Saudi Arabia. The pair rose at one point to around ¥158.75.
Trading is expected to continue to be driven by developments in the Middle East today. Although USD/JPY has broken above its 200-day moving average, it is also seen as potentially rising into the ¥159 range if tensions in the region intensify. The market is taking a wait-and-see approach ahead of the release of the U.S. September CPI, and trading activity is expected to remain limited until its release.