Today's outlook is for the dollar/yen rate to continue being pushed back toward the latter ¥152s, with market attention focused on moves around resistance near ¥154. Comments by the U.S. Treasury Secretary suggested a stance of curbing yen selling, raising the possibility that the yen-strengthening and dollar-weakening trend will continue.
In yesterday's market, the dollar/yen rate reached ¥152.89 in the Tokyo morning, entering a dollar-weakening and yen-strengthening range not seen since February. It subsequently broke below support around ¥154.00 in the Tokyo morning, accelerating its decline to below ¥153.00. At the same time, caution spread over the roughly ¥4 decline in a short period from last Friday's ¥156.75.
In the London market, the rate extended its gains to ¥154.42, but then traded in a range. In the New York afternoon, a bout of concentrated dollar selling and yen buying sent it plunging to around ¥153.48. It rebounded soon afterward, but was trading in the latter ¥153s in the Tokyo morning.
Following comments by U.S. Treasury Secretary Bessent, it was reported that he has an accurate understanding of the measures the Bank of Japan may take going forward, raising the possibility that speculative moves in the yen market will be curbed. The market has taken this as a factor that could restrain a recovery in the dollar-strengthening and yen-weakening trend.
In cross-yen trading, the euro/yen rate moved in the latter ¥178s, while pound/yen traded from the latter ¥207s to the ¥209s. Depending on the direction of dollar/yen, the market could again test the ¥177s. Euro/dollar was trading in the lower ¥1.16s, while some market participants were seen waiting for events related to the European Central Bank.
With the year-to-date low near ¥152.10 from January continuing to be viewed as a major target, the upside is expected to remain heavy.