The dollar-yen pair could face heightened volatility next week, driven by a highly anticipated speech from Bank of Japan Governor Kazuo Ueda on June 3 and a barrage of key U.S. economic indicators. The currency pair is projected to trade within a range of 157.50 yen to 161.00 yen.

The dollar-yen rate remains highly sensitive to developments in the Middle East. While U.S. officials disclosed on May 28 that negotiations between the U.S. and Iran had reached a provisional agreement awaiting approval from President Donald Trump, lingering uncertainty surrounding the deal keeps the bias toward risk-on dollar buying. On the domestic front, while the market eyes the 160-yen mark as a key line in the sand, concerns over fiscal expansion under the Sanae Takaichi administration are poised to weigh on the Japanese currency.

In Japan, Governor Ueda is scheduled to address the Kisaragi-kai on June 3, an event widely seen as crucial for gauging the course of the BOJ's upcoming June monetary policy meeting. A May 22 meeting between Governor Ueda and Prime Minister Takaichi has renewed market awareness that the central bank's policy path could face political pressure. Any signs that near-term rate-hike expectations are receding will likely intensify selling pressure on the yen.

Market focus is equally sharp on U.S. macro data. The economic calendar kicks off on June 1 with the May ISM Manufacturing Index and the final Manufacturing Purchasing Managers' Index (PMI), followed by the April Job Openings and Labor Turnover Survey (JOLTS) on June 2. June 3 brings the May ADP Employment Report and the ISM Non-Manufacturing Index, ahead of weekly initial jobless claims on June 4, culminating in the critical May nonfarm payrolls report on June 5. Whether these data points reinforce the U.S. rate-hike narrative will heavily dictate the pair's direction.

Source: MINKABU PRESS

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