The dollar-yen exchange rate in the foreign exchange market from tonight through tomorrow is likely to see upside limited by vigilance over currency intervention by Japanese authorities and expectations for an agreement to end hostilities between the United States and Iran. The expected range is 155.60 yen to 156.80 yen per dollar.

U.S. news site Axios reported on the 6th that the United States has prepared a one-page memorandum toward ending hostilities with Iran and is approaching an agreement. Iran is reported to be reviewing the U.S. proposal, and as excessive risk-aversion moves are receding, "safe-haven dollar buying" is prone to unwinding. Additionally, following the currency intervention conducted on April 30, multiple instances of sharp dollar-yen declines were observed during Japan's Golden Week holidays, leaving intervention concerns still strong. Vice Finance Minister for International Affairs Atsushi Mimura stated on the 7th that "the International Monetary Fund (IMF) rules on currency intervention do not limit the number of times."

However, it remains unclear whether Iran will respond to the U.S. proposal, and uncertainty over the outlook for the Middle East situation has not been dispelled. If U.S. crude oil futures regain upward momentum, dollar buying may emerge based on rising U.S. long-term interest rates amid heightened inflation pressure awareness, along with yen selling driven by speculation of deteriorating trade balance in Japan, which relies on imports for most of its energy.

Meantime, U.S. nonfarm productivity (preliminary) for the January-March quarter, initial jobless claims for the previous week, and U.S. construction spending for March are scheduled to be released tonight in Japan time.

Source: MINKABU PRESS

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