The morning forecast range for dollar/yen is ¥157.800–¥159.000. Even after strong US employment data, the range could not be broken, while developments at the Federal Reserve and the Bank of Japan are weakening directional momentum.
Dollar/yen rose 0.5% on a closing-price basis on the 6th, with the dollar bought on the favourable results of the US October employment report. It subsequently rose to around ¥158.56, but gains were capped as the rise in long-term yields narrowed, and it ultimately remained within the previous day’s range.
The morning forecast range was ¥157.800 to ¥159.000, and the view is that even if factors supporting dollar buying emerge, a move beyond this range will remain difficult. Expectations of additional Fed rate hikes and Bank of Japan policy developments remain firmly in place, making a clear direction in monetary policy difficult to establish.
The market is focused on the release of the US October CPI report, and the view is that the area around the 200-day moving average, near ¥158.69, is likely to be watched as an immediate upside target. Uncertainty about the outlook for AI investment is also cited as one factor curbing one-sided dollar buying.