The focus will be on the release of the BOJ Tankan and the summary of opinions. Trends in crude oil markets and developments concerning Iran could affect dollar-yen in the Tokyo market, while the pace of additional rate hikes and the terminal rate will also be key topics.
In the New York market on the 30th, dollar-yen initially fell to around ¥156.65 before rising again on movements in US long-term interest rates and recovering to ¥157.53. Euro-dollar rose as high as $1.1380 at one point, but the rise in long-term interest rates weighed on the pair, which fell to $1.1322 and set a new intraday low.
In today’s Tokyo market, attention is expected to focus on the direction of oil prices against the backdrop of US-Iran developments, following the release of the Bank of Japan’s Tankan survey (September survey) and the main opinions from the BOJ’s monetary policy meeting. Interest rate futures are increasingly pricing in a rate hike in December, and circumstances are expected in which expectations for an additional BOJ rate hike strengthen.
The focus of the Tankan survey will be the business conditions DIs for large enterprises, manufacturers and non-manufacturers, the selling price DIs, and trends in perceptions of labor shortages. In the main opinions, attention will be paid to comments on the rate hike discussions at the latest meeting, the pace of future rate hikes and the terminal rate. Depending on the results, there may be periods when yen buying and dollar selling prevail.
In the oil market, reports have emerged of a recovery in crude oil supplies and that Iran has received the US response to the confidence-building plan it proposed. Crude oil prices may move alongside expectations of progress toward peace. Meanwhile, vigilance over foreign exchange intervention by the government and the BOJ remains strong, and many market participants believe that periods of one-sided yen moves will be limited.