The dollar-yen exchange rate next week is likely to be influenced by the outcome of U.S.-Iran ceasefire negotiations and the results of the Bank of Japan's Monetary Policy Meeting. The expected range is 157.50 yen to 161.50 yen per dollar.

While a second round of peace talks between the U.S. and Iran could potentially take place as early as the 24th, it remains uncertain whether they will actually be held given President Trump's threatening remarks. Israeli Defense Minister Yoav Katz reportedly stated at a security situation assessment meeting with military leadership on the 23rd that "preparations to resume war with Iran have been completed and we are awaiting U.S. approval." If crude oil prices remain elevated amid views that the blockade of the Strait of Hormuz, a critical chokepoint for energy transport, will continue, dollar buying driven by rising U.S. interest rates on inflation concerns and yen selling due to awareness of Japan's deteriorating trade balance, which relies on imports for most of its energy, are likely to emerge.

Meanwhile, amid lingering uncertainty over the Middle East situation, the Bank of Japan's Monetary Policy Meeting scheduled for the 27th-28th is highly likely to keep policy rates unchanged. However, speculation persists that even if the BOJ forgoes a rate hike in April, it may leave the door open for a June increase, making it difficult to actively tilt positions toward yen selling. With crude oil prices expected to remain high, attention will focus on Governor Kazuo Ueda's assessment of inflationary pressures and whether the Outlook for Economic Activity and Prices (Outlook Report) will revise upward the consumer price inflation forecast. Note that the Federal Open Market Committee (FOMC) meeting on the 28th-29th and the European Central Bank (ECB) Governing Council meeting on the 30th are also expected to keep policy rates unchanged.

Major U.S. economic indicators to be released next week include the Richmond Fed Manufacturing Index for April and the Conference Board Consumer Confidence Index for April on the 28th, housing starts for March and durable goods orders for March on the 29th, Personal Consumption Expenditures (PCE deflator) for March and the preliminary real Gross Domestic Product (GDP) for the first quarter (January-March) on the 30th, and the ISM Manufacturing Index for April on May 1st.

Source: MINKABU PRESS

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