Ahead of the release of the US August PCE deflator, the morning forecast range for dollar-yen is ¥156.600–158.200. The market is watching the outlook for additional US rate hikes, depending on the deflator.
Yesterday, dollar-yen edged lower on a closing-price basis, trading mainly in the ¥157 range. Against the backdrop of movements in US long-term yields and remarks by New York Fed President Williams, market expectations for a rate hike at the October FOMC have receded. The market expects the US August PCE deflator, due to be released this morning, to rise 3.7% year on year, and the result could trigger a move in the dollar.
The full article, which provides the morning outlook for dollar-yen, focuses on the pair's potential reaction to the deflator and reports the view that the upside is likely to be capped when it moves into the ¥158 range. The actual PCE deflator reading and the results of upcoming US employment indicators are identified as points to watch.