In the Tokyo market after the holiday, the yen moved narrowly in the low ¥158s as expectations of US rate hikes and midterm election risks intersected. Direction was also unclear in the London market, with movements in Japan, the US and Europe mixed.
In the Tokyo market after the holiday, the yen traded in a range of ¥158.07–09 per dollar, weakening by 33 sen from the previous day as the dollar strengthened against the yen. Against the euro, it traded at ¥177.65–69 per euro, with the yen weakening by ¥1.04 as the euro strengthened.
The backdrop was strong US economic data. Expectations of US rate hikes strengthened after the September JOLTS employment report came in strong, prompting dollar buying as investors focused on the interest-rate differential between Japan and the US.
At the same time, preliminary results from the US midterm elections became a focus, and there were periods when risk aversion among investors intensified. In the Tokyo market, the yen was also seen rising temporarily into the ¥157 range.
In the London market, the yen moved narrowly at ¥158.36–46 per dollar. During overseas trading hours, it fell to the upper ¥158 range, then strengthened to around ¥157.40 as news emerged that the Democrats were leading, before returning to the ¥158 range on renewed dollar buying.
Euro strength and yen weakness stood out. Against the euro, the yen was at ¥178.28–38; euro/yen was at $1.1252–1262, and pound/dollar was at $1.3431–3441.