As dollar-yen continues to trade around ¥158, the market is watching as the Ministry of Finance’s total intervention reaches more than ¥15 trillion, while Bank of Japan rate-hike expectations also weigh on the upside.
In the foreign exchange market at the start of the week, dollar-yen is expected to continue trading around ¥158. The publication of the results of yen-buying intervention and expectations of an additional Bank of Japan rate hike are expected to support the yen, resulting in directionless trading.
According to the intervention results for the July–September quarter released by the Ministry of Finance, yen-buying intervention totaled ¥7.9756 trillion on 30 July, ¥5.5523 trillion on 31 July and ¥1.8714 trillion on 3 August, bringing the total to ¥15.3993 trillion including the November–December quarter. A coordinated intervention with the United States was also conducted on 31 July.
While the rising probability of a December rate hike, against the backdrop of U.S. interest-rate movements and U.S. employment data, is a factor supporting dollar buying, investors are also advised to watch for profit-taking after the recent rapid rise. Investors are assessing the outlook for a rate hike at the December meeting and the trend in economic indicators.