Dollar weakness after the Fed chair's press conference is seen as temporary, with USD/JPY expected to trade in a range from the upper ¥157.2 level to ¥158.6 today. The pair is expected to test the 200-day moving average again.
USD/JPY closed slightly lower the previous day, down less than 0.1% on a closing-price basis. After the Federal Open Market Committee (FOMC) left its policy rate unchanged, the pair temporarily rose to around ¥158.34. The dollar was then pushed back to the upper ¥157 range after Fed Chair Warsh gave no clear signal on an additional rate hike at the next meeting. Market pricing for interest rates has remained around 80%, and the dollar's weakness following Chair Warsh's press conference is viewed as a temporary move driven by position adjustments. In addition to persistently high oil prices, the US September PCE deflator due during the New York session today is highly likely to indicate accelerating inflation, and some market participants expect the dollar to rise again.
Based on expectations for higher oil prices and the release of the PCE deflator and flash GDP estimate, USD/JPY is expected to again test a break above the 200-day moving average, viewed as resistance around ¥158.55. The forecast range for USD/JPY is ¥157.200 to ¥158.600.
This morning's chart information and the full report are based on the daily report provided by Gaitame.com Research Institute. In light of the previous day's market review and today's outlook, USD/JPY is expected to be influenced by upcoming US economic data.