FX summary: USD/JPY hovers in the 160.20s as U.S. crude futures extend gains in off-hours trading

In the Tokyo foreign exchange market on the 2nd, the dollar was trading around 160.29 yen as of 10:00 a.m., up about 30 sen from 5:00 p.m. on the previous day, reflecting dollar strength against the yen.

In New York trading on the 1st, the dollar closed around 160.18 yen, up about 45 sen from the previous day. U.S. crude oil futures surged amid heightened Middle East tensions, pushing U.S. long-term interest rates to their highest level in about 20 months on concerns that rising oil prices could fuel inflation. This sparked dollar buying, with the currency briefly touching 160.27 yen - its highest level since July 31.

Concerns that higher energy import costs could worsen Japan's trade balance kept dollar-buying sentiment dominant in Tokyo. While caution remains over potential currency intervention by Japanese authorities above the 160 yen level, gains in U.S. crude futures during off-hours trading continue to support the dollar. Expectations that the U.S.-Japan interest rate gap is unlikely to narrow amid global rate increases kept the dollar-yen pair trading in the 160.20s.

The euro traded around 1.1583 dollars, down slightly over 0.0010 dollars from 5:00 p.m. on the previous day. Against the yen, the euro was around 185.67 yen, up nearly 20 sen from the same reference point.

Source: MINKABU PRESS

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