Week in review
The USD/JPY opened at 154.61, near this week's lows. The pair edged higher on 17 November, supported by news that Prime Minister Sanae Takaichi and BOJ Governor Kazuo Ueda would hold talks on 18 November. The pair climbed into the 155 range during US hours. Brief yen buying emerged after the meeting on 18 November and pushed the USD/JPY temporarily below 155, but the upward trend continued as fading expectations for Fed rate cuts supported the dollar. On 19 November, Finance Minister Satsuki Katayama, Minister of State for Economic and Fiscal Policy Minoru Kiuchi, and Governor Ueda held discussions in the early evening. Yen selling strengthened after Katayama said no exchange-rate issues had been discussed, and the pair moved above 156. It continued its ascent, rising into the 157 range as dollar buying accelerated due to news that the US November employment report would be released after the December FOMC meeting, and after the minutes of the October FOMC showed increased caution toward an additional rate cut. On 20 November, share prices rose sharply on strong earnings from a major US semiconductor manufacturer, pushing the USD/JPY up to 157.90. However, the pair did not reach 158, and Finance Minister Katayama's 21 November comment that "intervention is an option" helped keep the USD/JPY below 157.50 (Figure 1). Among G10 currencies this week, fading expectations for Fed rate cuts produced broad-based dollar strength. The yen weakened across the board, with the EUR/JPY rising toward 182 (Figure 2).
FIGURE 1: USD/JPY
Note: As at 15:00 JST on 21 November
Source: EBS, Refinitiv, MUFG
FIGURE 2: MAJOR CURRENCIES' RATE OF CHANGE VS USD THIS WEEK
Note: As at 15:00 JST on 21 November
Source: Bloomberg, MUFG