Dollar-Yen Climbs to 158 Yen Range on Elevated U.S. Yields
The dollar-yen pair strengthened in the Tokyo foreign exchange market on October 6, reaching the 158-yen range by noon. The dollar's resilience was supported by elevated U.S. long-term interest rates, which kept selling pressure at bay. As of 12:00 p.m., the pair stood at 158.00 yen, up from the New York close of 157.91 yen. The pair briefly dipped to 157.77 yen around 10:30 a.m. but rebounded as the U.S. 10-year Treasury yield stabilized in the mid-5.31% range.
From a technical standpoint, the daily Ichimoku Cloud conversion line at 157.71 yen provided strong support, reinforcing the pair's upward momentum. Meanwhile, EUR/USD faced significant resistance, trading at $1.1214 at noon, down from $1.1223 in New York. The euro's recovery was capped at $1.1231 before slipping to $1.1212, with concerns over French fiscal policy further limiting its upside.
EUR/JPY remained rangebound, trading at 177.19 yen, slightly weaker than the New York close of 177.22 yen. The pair oscillated around the 177.10-yen level, reflecting the tug-of-war between dollar-yen and EUR/USD dynamics. U.S. Treasury Secretary Bessent predicted third-quarter growth exceeding 3% and core inflation declining to around 2.3%. He also suggested that mortgage rates could fall if tensions with Iran de-escalate.
The U.S. 10-year Treasury yield, while slightly lower than the previous day's highs, remained elevated, supporting the dollar's strength. Market participants expect the Federal Reserve to continue gradual rate cuts, citing solid U.S. economic indicators and persistent inflation. Secretary Bessent's comments reinforced this outlook, indicating that the dollar's firmness is likely to persist. In contrast, the euro's recovery remains hindered by ongoing uncertainty in French fiscal policy.