In early New York trading, dollar-yen rebounded to the upper ¥157 range as markets awaited the US FOMC and the Bank of Japan's policy meeting. Lower oil prices and calmer equity markets were also factors, while the outlook is expected to depend on monetary policy in both countries.
In today's foreign-exchange market, dollar-yen has seen a gradual rebound during overseas trading and has risen to the upper ¥157 range. With the FOMC and the Bank of Japan's policy meeting approaching, markets are increasingly focused on the monetary policy outlook in both countries.
Although a hold at the FOMC is increasingly viewed as certain, expectations for a December rate hike are spreading. The probability priced in by short-term money markets is said to be approximately 80%, and some believe the yen's response could be limited depending on the details.
A hold is also expected from the Bank of Japan, while some market participants are voicing higher expectations for a December rate hike. Markets believe the Bank of Japan's stance will determine the extent of any yen appreciation, and attention is focused on developments ahead.
NY-cut option expiries were observed around ¥157.85 to ¥158. On the 27th, trading was expected at ¥157.85 and ¥158.00, and movements in US equities and oil could also affect the yen.