Yen Loses Ground To The Dollar Despite US-Iran Deal Hopes

The Dollar fell against the Euro and the Pound on US-Iran diplomacy but not against the Yen, and USD/JPY reached 158.00, its highest since October 29. It dipped to just above 157.50 when the Dollar's slide elsewhere was at its deepest, then climbed to the high. It's trading just under 158.00.

Japan buys nearly all of its Crude Oil abroad, so the slide in its price on the US-Iran talks cuts Japan's import bill, and the Yen weakened anyway. The Bank of Japan (BoJ) doesn't decide again until December 17-18, so nothing on the Japanese side of USD/JPY's rate gap is scheduled to change for more than six weeks.

S&P Global's final US manufacturing index fell to 54.9 from 56.0, and USD/JPY slipped back to just above 157.50. Afterward, the Institute for Supply Management (ISM) factory survey rose to 55.5, above the 54.6 forecast, and the pair climbed back to just under 158.00.

On the calendar

BoJ meeting minutes are due at 23:50 GMT on Wednesday. September wage data follow at 23:30 GMT on Thursday, forecast at 3.8% from a year earlier for a second month. BoJ Governor Ueda gives a lecture at the International Monetary Fund (IMF) at 16:00 GMT on Friday, and all three feed into the BoJ's December decision.

Wednesday's ISM services index, due at 15:00 GMT, is forecast at 54.8 after 54.9, and Friday's October payrolls report, forecast at 65K after 29K, comes at 13:30 GMT. Both weigh on USD/JPY's rate gap, after the Fed held at 3.75%-4.00% on October 28.

On the charts

USD/JPY has stayed between just above 156.00 and near 159.00 since late September, after a rebound from the September low just under 153.00. The 50-day and 200-day Exponential Moving Averages (EMA) are both inside that range, less than a fifth of a yen apart. The pair has crossed them repeatedly since early October.