The dollar-yen rate is carrying forward the yen-up, dollar-down trend during the New York session, with the focus on how New York traders digest the move. The market is expected to remain under pressure from expectations of a BoJ rate hike and concerns about intervention, which are likely to cap the upside.
The dollar-yen rate fell further from the daytime session into the latter part of the day, at one point declining to the low 156s while moving around ¥157. Although the dollar's support could change depending on the market's reaction to recent U.S. data, expectations for an acceleration in the BoJ's rate-hike pace and concerns about intervention are capping the upside.
Some reports say market participants see a 0.25% rate hike at the BoJ's meeting this month as likely, while expectations for a large 0.50% hike have receded. This could lead to periods in which yen buying and dollar selling regain momentum, making developments in the New York market a focus of attention.
Key data releases are scheduled for tonight, including the U.S. July trade balance, initial jobless claims for the previous week and the August ISM non-manufacturing index. Depending on the results, movements in U.S. long-term interest rates and fluctuations in oil prices could affect the dollar market.
The market is watching closely to see whether the dollar-yen rate can hold in the low 156s or move to test the upside again, while assessing the BoJ's future response and the implications of U.S. data. Concerns about BoJ intervention and expectations of demand for the dollar in the event of a crisis could continue to intersect.