USD/JPY traded in a range without a clear direction ahead of the three-day holiday in Japan and the U.S. Developments involving the Fed's rate outlook, the ECB minutes, U.S. economic data and Iran were key market factors. With further data releases ahead, attention is focused on the U.S. CPI, the Michigan index and developments in Europe.
From 6:10 a.m. on Thursday, 8 October, to 5:55 a.m. on Friday, 9 October, USD/JPY continued to trade around ¥158 in a directionless range, with no decisive factor emerging. Movements in U.S. long-term interest rates and crude oil prices drove the market, making it difficult for a trend to develop.
One focus highlighted that day was Prime Minister Takaichi's (高市) view that the policy differed from reflationary policy. She reaffirmed the position that the growth strategy, involving more than ¥370 trillion in public and private investment, differed from the previous reflationary policy.
Federal Reserve Governor Waller said that additional rate hikes would be appropriate to return inflation to 2% quickly if economic data continued to develop as expected, adding that there was flexibility over the timing of rate hikes.
The ECB released the minutes of its September meeting, which reportedly showed that all members agreed that inflation risks had shifted further to the upside. U.S. initial jobless claims came in below expectations and remained at a low level, providing a basis for assessing economic conditions in the United States and Europe.
The U.S. president said there would be no attack on Iran before the midterm elections. This led to a narrowing of gains in crude oil prices.