The USD to JPY exchange rate is currently range-bound. Key drivers include the interest rate differential, with the Federal Reserve expected to cut rates, impacting the USD's strength. Meanwhile, the Bank of Japan (BOJ) recently raised rates, which supports the JPY. Additionally, Japan's improving business sentiment may reinforce the case for further BOJ rate hikes.
The USD/JPY pair is likely to trade within a stable range over the next few months, influenced by U.S. Treasury yields and Japanese government intervention watches. Upside risks include strong economic data or intervention from Japan to support the yen, while downside risks may arise from further U.S. interest rate cuts or a drop in global commodity prices affecting risk sentiment.
Recent movements show the USD/JPY is at 90-day highs near 157.9, reflecting a stable range from 150.4 to 157.9. Oil prices also remain supportive, trading at 30-day highs near 63.01, adding pressure on import costs for Japan.