In the foreign exchange market from tonight through tomorrow, focus will be on whether the dollar-yen pair can break through the high of 157.93 yen reached on the 6th, when Japanese monetary authorities are believed to have conducted currency intervention. The expected range is 1 dollar = 157.20 yen to 158.40 yen.

The government and the Bank of Japan likely conducted multiple currency interventions during Golden Week (GW), and on the 6th, the pair plunged nearly 3 yen just as it was approaching 158 yen. Concerns over intervention remain, which is likely to weigh on the dollar-yen exchange rate. Bank of Japan Policy Board member Hajime Takata stated in a speech on the 14th that "if there are no clear signs of a downward trend in the economy in concrete numbers, it would be desirable to raise interest rates as early as possible," which may also restrain yen selling as a rate hike at the June meeting becomes more anticipated.

However, following the April U.S. Consumer Price Index (CPI) released on the 12th, the April U.S. Producer Price Index (PPI) released on the 13th also showed strong inflationary pressure, strengthening speculation that the start of rate cuts by the Federal Reserve Board (FRB) will be delayed. The persistently high crude oil prices are also leading to expectations of higher U.S. interest rates, and dollar buying and yen selling in anticipation of a widening Japan-U.S. interest rate differential is expected to remain firm.

Major U.S. economic indicators to be released tonight Japan time include April retail sales, the previous week's initial jobless claims, April import/export price index, and March business inventories. In addition, New York Fed President Williams and FRB Governor Cook are scheduled to speak.

Source: MINKABU PRESS

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