Against a backdrop of higher oil prices and pressure on the yen to weaken, USD/JPY is expected to test the key ¥160 level. The article reviews market movements on 17 August and the outlook for today.
The article provides a clear explanation of the previous session's moves and the outlook for the major currency pairs in the FX market. It gives today's popular USD/JPY range as ¥158.5-¥160.2 and reviews intraday price movements, along with developments in the Tokyo and overseas markets.
As for economic indicators on Monday, 17 August, Japan's preliminary GDP growth was +1.1% annualized, below the market forecast of +2.0%. Private consumption was slightly negative, while capital investment was also negative. China's July retail sales rose 0.6% year on year, below the forecast of +1.5%.
Reports say that the US president expressed opposition to extending the memorandum concerning Iran and emphasized a willingness to bomb Oman as well. Reuters, meanwhile, reported that, according to Iranian officials, Iran could raise tensions around the Strait of Hormuz and launch an attack if the United States did not fully implement the memorandum.
As for the USD/JPY outlook, rising oil prices are seen as a factor that could weaken the yen, while it remains unclear whether expectations of a Bank of Japan rate hike can contain the move. If oil prices continue to rise today, USD/JPY is expected to test a break above ¥160.