The dollar-yen rate fell back to the upper ¥157 range in New York on the 9th. Dollar selling prevailed amid expectations of progress in US-Iran talks and lower oil prices.
The dollar-yen rate closed at ¥157.91 in New York on the 9th, down approximately 57 sen for the dollar from the previous business day. Although the rate rose as high as ¥158.18 during the day, dollar selling again prevailed late in the session, and the rate reached the day’s low of ¥157.67.
The US Department of Commerce’s final wholesale inventory reading rose 0.7% month on month, while wholesale sales increased 2.8%, exceeding market expectations and indicating resilience in the US economy. Dollar buying initially prevailed, but crude oil futures plunged as expectations grew for progress in negotiations to end the US-Iran fighting and for tensions in the Middle East to ease. WTI fell as low as $85.02.
Reports that talks were expected to resume following proposals by Qatar and Pakistan, that Iran would be allowed to enrich uranium to as much as 3.67%, and that preparations were under way to release assets worth $6 billion to $9 billion also contributed to dollar selling. The euro-yen rate and other cross-yen pairs remained firm, while the dollar index showed a downward trend.
Cautious comments regarding US monetary policy also affected the market. The direct triggers for the dollar’s decline were easing geopolitical risks in the Middle East and lower oil prices. Going forward, the market is expected to move while factoring in the degree of progress in the talks, oil price trends, and the direction of monetary policy in Japan and the United States.