At the start of the week, both the UK and US markets will be closed. The UK market is closed for the Spring Bank Holiday, and the US market is closed for Memorial Day. As a result, trading activity is expected to be low, leading to a cautious or lightly corrective trading environment.
Last week ended with a slightly weaker dollar. The yield on the US 10-year Treasury note was capped at the key 4.50% level and fell to around 4.46%. The University of Michigan's one-year inflation expectation came in at 3.3%, below expectations, which influenced the market. The USD/JPY pair faced selling pressure at the 157 yen level.
In the Tokyo market at the start of the week, USD/JPY softened to around 156.60. The 157 yen level remains a significant resistance. The yield on Japan's 10-year government bonds continues to rise, reaching 1.02% today. Additionally, remarks from Bank of Japan Governor Ueda and Deputy Governor Uchida were seen as hawkish by the market.
In the upcoming overseas markets, it will be important to monitor the extent of corrective selling in USD/JPY.
Today, with no major economic indicators expected, the market is likely to remain range-bound.
