USD/JPY next week is likely to seek a foothold in the ¥160 range, with expectations of a US rate hike and intervention concerns expected to create conditions for testing the upside.
USD/JPY is expected to move back into the ¥160 range next week, with the central range seen at ¥159.00–¥160.40 and attention focused on whether the rise can continue in the ¥160 range. The currency temporarily rose to ¥160.049 on 12 November, while memories of Japan's yen-buying intervention in the summer have brought market tensions back. The Japanese authorities' efforts to restrain yen weakness are also on investors' minds, and intervention concerns could cap the upside.
Expectations of a US rate hike are cited as a factor supporting the dollar, while Japanese monetary policy and intervention concerns are expected to limit the upside. The focus next week will shift to whether there are new factors supporting dollar buying and to indicators relevant to an intervention decision. Expectations of additional US rate hikes, the FOMC minutes and comments from senior Federal Reserve officials could affect USD/JPY next week.