USD/JPY is expected to rise into the upper ¥157 range as the yen weakens, with the preceding days’ narrow trading, the weakness in the ISM Non-Manufacturing Index and heavy buy and sell orders in the order book serving as the market’s main focal points.
USD/JPY traded in a narrow range yesterday, with range-bound conditions continuing, and closed slightly higher, indicating a weaker yen than at the 4 August close. Although the ISM Non-Manufacturing Index came in below market expectations, USD/JPY showed little reaction. Meanwhile, following remarks by Kashkari (カシュカリ), president of the Federal Reserve Bank of Minneapolis, views have been reported that a modest rate hike should be initiated immediately.
In today’s chart analysis on 6 August, particularly heavy buy orders were seen around ¥155 in the order book and are considered likely to be providing support. Heavy buy orders were also seen in the mid-¥164 range, which may serve as an indication of renewed buying interest. By contrast, heavy sell orders around ¥164 are reportedly acting as resistance.
The order-book conditions also show heavy selling around ¥160, suggesting that trading concentrated around round numbers is attracting attention. The combination of order depth and price levels suggests that the market is likely to continue moving within a range.
The latest 24-hour correlation analysis identifies EUR/JPY, GBP/JPY and AUD/JPY as the currency pairs most strongly correlated with USD/JPY, while the New Zealand dollar is considered the weakest currency. The yen remained generally in positive territory before turning negative late at night, while the dollar fluctuated around zero.