Week in review

The USD/JPY opened at 159.37, near this week's low. Oil prices appeared to have stopped falling for now as at end-May, with hopes for progress in US-Iran ceasefire negotiations offset by reports of further exchanges of attacks between the two countries. The dollar continued to strengthen, mainly during US trading hours, as US economic indicators improved almost daily. The pair briefly fell below 159.50 on 3 June after Prime Minister Sanae Takaichi's remarks in the Diet and BOJ Governor Kazuo Ueda's speech, but soon rose to a high of 160.09. It subsequently struggled to extend gains amid concerns about intervention by Japanese authorities, leaving the battle around 160 ongoing (Figure 1). The dollar strengthened across the board against G10 currencies this week, even though the scale of moves was not large. The New Zealand dollar and Norwegian krone, which had led on rate-hike expectations and other factors, were relatively weak, while the sterling and euro were somewhat firmer ahead of central bank meetings from next week onward (Figure 2).

FIGURE 1: USD/JPY

Note: As at 13:00 JST on 5 June
Source: EBS, Refinitiv, MUFG

FIGURE 2: MAJOR CURRENCIES' RATE OF CHANGE VS USD THIS WEEK

Note: As at 13:00 JST on 5 June
Source: Bloomberg, MUFG