Yen Range-Bound as Weak US Sales Offset Oil Price Pressures

The yen traded in a narrow range around the lower 159 level against the dollar in Tokyo foreign exchange trading on July 17th. The weak U.S. retail sales and elevated oil prices are offsetting each other, leaving the market without clear direction.

As of 9:00 a.m., the dollar-yen pair stood at 159.21-22 yen, virtually unchanged from 159.20-21 yen at 5:00 p.m. late last week. The pair moved narrowly around the 159.10-20 yen range during European hours before tumbling to near 158.60 yen in U.S. trading after July U.S. retail sales fell 0.6% month-on-month.

Asset managers note that expectations for early U.S. rate hikes have receded further, exerting downward pressure on the dollar-yen pair. Wariness over potential currency intervention as the pair approaches the 160-yen level is also capping upside in the dollar-yen.