The dollar-yen exchange rate is expected to see reduced excessive yen selling next week amid heightened concerns that Japanese currency authorities may proceed with further intervention. The expected range is 154.00 yen to 159.00 yen per dollar.

On the evening of April 30th, Finance Minister Satsuki Katayama and Vice Finance Minister for International Affairs Atsushi Mimura successively suggested that forex intervention was imminent, after which intermittent yen-buying and dollar-selling operations, believed to be forex intervention by Japanese currency authorities, drove the dollar-yen rate down sharply by more than 5 yen to 155.57 yen at one point. On May 1st, Vice Finance Minister Mimura indicated to reporters his stance of maintaining vigilance over market movements during the holiday period, suggesting the possibility of further intervention. That same evening, the dollar-yen rate dropped more than 1.50 yen in just about 10 minutes, falling to 155.49 yen.

However, views remain strong that the conflict between the U.S. and Iran will be prolonged, and the situation of the dollar being favored as the key currency in a flight to quality remains unchanged. On the 30th, U.S. President Trump indicated his intention to maintain a naval blockade on Iranian ports, and on the 1st, the U.S. news site Axios reported that "U.S. Central Command's General Cooper and Chairman of the Joint Chiefs of Staff General Cain briefed President Trump on new plans regarding possible military action against Iran." If crude oil futures regain upward momentum, yen selling driven by concerns over Japan's worsening trade balance is likely to flow in.

Major U.S. economic indicators to be released next week include factory orders for March on the 4th, the ISM non-manufacturing index for April and JOLTS job openings for March on the 5th, ADP employment statistics for April on the 6th, initial jobless claims for the previous week on the 7th, and employment statistics for April and the University of Michigan consumer sentiment index (preliminary) for May on the 8th. Domestically, the minutes from the Bank of Japan's March monetary policy meeting will be released on the 7th, and the monthly labor survey for March on the 8th.

Source: MINKABU PRESS

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