Philly Fed index forecast beat expectations and Williams, NY Fed President hawkish remarks support a firmer USD/JPY.

【4/18Market Overview

In Tokyo time, the USD/JPY fell briefly to the 153.95 range due to the drop in the U.S. 10-year Treasury yield after remarks by Kanda, the Finance Minister, that “excessive fluctuation or disorderly moves in the exchange rate would negatively impact the economy and financial system.” However, once it became clear from the G7 statement that matters related to the exchange rate were appended in the latter part, the USD/JPY was bought back to the 154.30 level. In European hours, USD/JPY traded in the early 154s range.10In New York time, as the May Philadelphia Fed manufacturing index (Philly Fed) exceeded expectations, along with the rise in the U.S. 10-year yield, the USD/JPY rose to 154.68. Also, Williams, President of the New York Fed, said that there is no urgency to cut rates, that rate cuts are not my base forecast, but if the data require it, the Fed will raise rates; and Bowman, President of the Atlanta Fed, said that “U.S. inflation is too high,” and that “the path to 2% inflation is slow and difficult,” and that “it is not appropriate to start cutting rates before the end of the year.” These hawkish remarks from U.S. officials supported the dollar/yen.