USD/JPY is expected to remain volatile in the New York market as traders watch developments in the Middle East and crude oil prices, while US interest rates are increasingly seen as likely to determine the pair’s near-term direction.
USD/JPY is widely expected to fluctuate depending on the intensity of tensions in the Middle East and movements in crude oil prices in the New York market. Investors are monitoring geopolitical risks and energy prices while remaining alert to volatility in the foreign exchange market.
US interest rates are the focus for the day, with growing expectations that the Federal Reserve’s policy stance and the gap between short- and long-term interest rates will determine the dollar’s underlying trend. The market is waiting for data releases that may signal the direction of interest rates.
In the short-term market, there are situations in which shifts in interest-rate expectations have a greater impact than news or data surprises. Investors are strengthening their risk management and appear reluctant to adjust their positions excessively.
USD/JPY could become more active again depending on further developments. Keeping abreast of the latest developments in the Middle East and crude oil prices is likely to be a key consideration for trading.