Reports highlighted a decline in Australian employment and trends in key US and UK indicators, while attention is also focused on comments and developments involving the BOJ and the Federal Reserve. The 16 October issue of 外為どっとコム's daily report organizes the key data and comments from market participants as factors that could influence the outlook for USD/JPY.
Australia's September employment report released from 15 to 16 October showed new employment falling short of market expectations, while the unemployment rate remained around 4.7%. As a result, changes on the supply side of the Australian economy became a focus for the market. BOJ Policy Board member Koeda (小枝) said that financial conditions remained accommodative and that, given the risk of rising prices, the Bank would not be excessively cautious about raising rates.
UK August GDP rose 0.1% month on month, exceeding market expectations, while industrial production rose 0.8%, a substantial upside surprise. The trade balance was in deficit. In the United States, September PPI rose 6.3% year on year, well above market expectations, while September retail sales remained firm, rising 0.8% month on month, with core sales up 0.9%.
For the USD/JPY outlook, the 200-day moving average is a focus, and developments in US long-term interest rates are providing grounds for considering range movements of around 1/1080. Ahead of Federal Reserve Chair Warsh's speech, expectations for an additional rate hike could resurface in some quarters, keeping the market focused on upcoming data releases.
Depending on the market reaction to US employment indicators and developments in monetary and fiscal policy, USD/JPY could trade around ¥158. Attention will remain focused on new data, including US CPI and PPI and the fiscal balance, and on how it reflects uncertainty in the foreign-exchange market.