On Monday, the Tokyo market was closed for a holiday. During this time, USD/JPY dropped to 157.96 yen as selling dominated. Selling of cross-yen pairs increased, leading to both yen buying and dollar buying.
The same trend continued in the European market. USD/JPY fell below Friday’s post-U.S. employment data low of 157.23 yen and reached a daily low of 156.92 yen.
However, in the New York market, the NY Dow rebounded, and risk-on sentiment led to yen selling. This caused cross-yen pairs to rise, with USD/JPY climbing back to 157.81 yen. In the end, it returned to early Tokyo levels, showing a back-and-forth movement.
After last Friday’s strong U.S. employment data, the market now expects the Federal Reserve to reduce interest rates only 1–2 times this year.
On the other hand, attention is on the Bank of Japan (BOJ) possibly raising interest rates.
Today, Deputy Governor Himino of the BOJ will hold a press conference. If he gives hints about next week’s BOJ meeting, yen buying may increase.
USD/JPY Predicted Range: 158.20–156.80
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