Key Facts
• On September 16, the yen rose to the lower 147 range against the dollar.
• Minister Shinjiro Koizumi announced his candidacy for the LDP leadership election.
• Market views suggest Koizumi’s candidacy may lead to easier Bank of Japan rate hikes.
• SBI Liquidity Market’s Marito Ueda noted the dollar’s morning strength was sold off.
• Former Minister Sanae Takaichi’s potential win could complicate rate hikes.
• Strategist Shogo Kariya predicts dollar rebound post-FOMC meeting this week.
• Kariya forecasts a yen-dollar range of 145.50 to 150 this week.
• U.S. 10-year Treasury yield closed at 4.04%, down 3 basis points on September 15.
• Bloomberg Dollar Spot Index fell 0.3% on the same day.
• Markets fully priced in a 25-basis-point rate cut at the September 16–17 FOMC meeting.
Summary
The yen strengthened slightly against the dollar on September 16, reaching the lower 147 range. This followed Minister Shinjiro Koizumi’s announcement of his candidacy for the Liberal Democratic Party (LDP) leadership, which raised expectations for potential Bank of Japan rate hikes. Analysts noted that Koizumi’s candidacy provided a reason to sell the dollar, which had shown strength earlier in the day. Meanwhile, former Minister Sanae Takaichi’s potential leadership win could complicate rate hikes, though her stance may not be as dovish as feared. Strategist Shogo Kariya anticipates a dollar rebound after this week’s Federal Open Market Committee (FOMC) meeting, forecasting a yen-dollar range of 145.50 to 150. On September 15, the U.S. 10-year Treasury yield fell to 4.04%, while the Bloomberg Dollar Spot Index dropped 0.3%. Markets have fully priced in a 25-basis-point rate cut at the FOMC meeting, with expectations of 2.7 rate cuts by year-end.
