In the New York market on the 24th, the dollar-yen pair fell to ¥158.60 before rising to ¥159.04 and closing at ¥158.90. Movements in US economic indicators and long-term interest rates, along with reports on US-Iran talks, are creating a divide between expectations of a continued range-bound market and a break above ¥160.
In the New York foreign exchange market on the 24th, the dollar-yen pair fell to ¥158.60 in the first half of the session before rebounding to ¥159.04, and ultimately ended trading around ¥158.90. Views were split between expectations of a prolonged range-bound market and speculation over the possibility of a break above ¥160.
US initial jobless claims for the previous week came in below expectations, indicating a healthy labor market, while the Kansas City Fed manufacturing index and new home sales exceeded market forecasts. A weak 7-year Treasury auction and the reduced scale of long-term government bond buybacks pushed up long-term interest rates and supported dollar buying.
The pair subsequently struggled to extend its gains as reports suggesting progress in US-Iran talks prompted a decline in crude oil prices and heightened caution over a correction in yen weakness.
Looking ahead from the 25th, elevated US long-term interest rates are likely to support the dollar, but if inflation concerns recede depending on movements in crude oil prices, lower rates and dollar selling are also possible. Market views are split between expectations that the ¥152–¥158 range will continue and those that the pair will target ¥160.