The focus for USD/JPY is on the battle around ¥158.53, near the 200-day moving average. Depending on the contents of the FOMC minutes released on the 7th, expectations for an early US rate hike could resurface.
The focus for USD/JPY is on the battle around the 200-day moving average. Depending on the contents of the FOMC minutes due to be released on the 7th, the outlook for an early rate hike by the Federal Reserve could resurface and is likely to influence the direction of the market for the time being. USD/JPY rose to around ¥158.25 the previous day, with yen selling leading the market against a backdrop of reports that the Bank of Japan was cautious about an October rate hike.
Governor Ueda Kazuo (植田 和男) of the Bank of Japan indicated that, even after the September rate hike, the Bank would maintain accommodative financial conditions while continuing to consider raising the policy rate depending on economic, price and financial conditions. At the same time, reports emerged that the Bank of Japan was considering expressing the view that the underlying inflation rate had reached around 2%.
The US trade deficit for August was $105.6 billion, exceeding market expectations, while imports hit a record high. Although widening fiscal deficits are often seen as a factor weakening the dollar, some view them as evidence of resilient domestic demand. In Europe, easing concerns over France's fiscal position prompted euro buying and dollar selling.
The FOMC minutes are scheduled for release on the afternoon of the 7th Japan time. A US 10-year Treasury auction is also scheduled, and attention will need to be paid to trends in long-term interest rates. Minutes from the ECB Governing Council meeting and the release of US economic data are also scheduled for this week.