The dollar-yen exchange rate next week will likely hinge on the outcome of the second round of US-Iran peace negotiations, which could take place as early as this weekend. The expected trading range is 158.00 yen to 161.00 yen per dollar.

US President Trump mentioned on the 16th the possibility of holding a second round of negotiations with Iran over the weekend aimed at ending hostilities. Trump also announced the same day that Israel and Lebanon had agreed to a 10-day ceasefire. If concerns over a prolonged Middle East conflict ease, the unwinding of dollar-long, yen-short positions built up as a flight to quality could spread. However, some view reaching an agreement as difficult, and the situation is expected to remain unpredictable. Even if a ceasefire is agreed upon, it is unlikely that oil supplies will increase immediately; if crude oil futures remain elevated, "safe-haven dollar buying" is unlikely to diminish significantly.

Meanwhile, Bank of Japan Governor Kazuo Ueda told a press conference following the G20 Finance Ministers and Central Bank Governors Meeting on the night of the 16th local time (morning of the 17th Japan time) that "monetary policy will be decided at each meeting by examining the reliability of outlook and risks based on data and information." His failure to clearly signal a rate hike at the April meeting is likely to weigh on the yen. However, Finance Minister Satsuki Katayama said she told the G20 meeting that the government is "monitoring market developments with a high sense of urgency," creating an atmosphere where aggressive yen selling is difficult due to intervention concerns.

Key US economic indicators to be released next week include March retail sales on the 21st, April flash PMI on the 23rd, and the final University of Michigan Consumer Sentiment Index for April on the 24th. Domestically, the trade balance for March will be published on the 22nd, and the nationwide CPI for March on the 24th.

Source: MINKABU PRESS

*Translated by generative AI. Click here for the original article.