Dollar-Yen Pair Faces Uphill Battle as Rate Hike Expectations Dim

The dollar-yen pair is expected to struggle to extend gains as the weaker-than-expected U.S. September employment report reduces expectations for additional rate hikes by the Federal Reserve.

Rising U.S. long-term yields support the dollar, but the persistent wariness over currency intervention by Japanese and U.S. authorities will likely cap the pair's upside.

The past week saw a tug-of-war between crude oil price gains driven by escalating Middle East tensions and caution over yen-weakening intervention. The pair traded in a range of 156-158 yen, with some sessions reaching as high as 158.00-10 yen.