Dollar-yen rose to the ¥154.80 area in the Tokyo market on the afternoon of the 15th. Expectations spread that the FRB would decide to raise rates within the week, and dollar buying and yen selling prevailed against a backdrop of rising US long-term yields.
In the Tokyo foreign-exchange market on the afternoon of the 15th, dollar-yen rose into the upper end of its ¥154 range. Expectations grew that the FRB would decide to raise rates at its meeting during the week, and dollar buying and yen selling continued as markets focused on a widening US-Japan interest rate differential amid rising US long-term yields.
At 10 a.m., the dollar-yen rate was trading at ¥154.65–¥154.66, with the yen down 26 sen against the dollar from the previous day. The dollar rose further in the afternoon, at one point approaching the upper end of the range at ¥154.89. Euro-yen traded in a ¥178.14–¥178.68 range, with the yen's weakening trend continuing.
US long-term yields rose against a backdrop of expectations for an additional FRB rate hike, prompting markets to focus on a widening US-Japan interest rate differential. Dollar buying and yen selling prevailed, and the yen weakened from the previous day's level. Meanwhile, pound-dollar remained weak amid expectations that the Bank of England's MPC would leave rates unchanged.
At the start of the week, expectations emerged that the BoJ would accelerate its rate hikes, and yen buying led in the morning. The yen strengthened against the dollar from the end of the previous week, but dollar buying subsequently resumed on rising crude oil prices, and the yen weakened again in the afternoon. With the policy decisions of the US and Japanese central banks due this week, market participants are watching their potential impact on exchange rates.