Will the Dollar-Yen Rate Rebound to the Mid-162-Yen Range Amid Rising U.S. Interest Rates?

Will the Dollar-Yen Rate Rebound to the Mid-162 Yen Range Amid Rising U.S. Interest Rates?

21.07.2026 New

In the previous day’s U.S. currency markets, the U.S. dollar held steady as crude oil prices rose amid tensions in the Middle East and long-term U.S. interest rates climbed on concerns that inflation was picking up again.Although the U.S. June Composite Leading Economic Index fell 0.2% month-over-month, suggesting that caution regarding the economic outlook persists, the yield on the 10-year U.S. Treasury note rose to the 4.59% range, and the Dollar Index climbed to around 100.93.In early-week trading, the USD/JPY pair traded in the low to mid-162 yen range, and the 162.50 level is currently seen as a key resistance level. On the downside, the 162.00 and 161.50 levels are likely to act as support zones, and we will be watching to see if U.S. interest rates continue to rise.

In the European currency markets, the construction sector showed signs of recovery as eurozone construction spending rose 0.4% month-over-month in May. Meanwhile, with the European Central Bank (ECB) Governing Council meeting scheduled for this week, concerns about a resurgence of inflation driven by high oil prices have left the euro searching for direction against the U.S. dollar.The euro-dollar pair fell to around 1.1417 in yesterday’s trading and continues to trade in the low 1.14 range at present.Resistance levels around 1.1450 to 1.1500 and support levels around 1.1400 to 1.1380 are likely to be closely watched; we will be watching to see if the pair can hold above the 1.14 level following the release of the German and Eurozone ZEW Economic Sentiment surveys.

Today’s key economic indicators include Hong Kong’s June Consumer Price Index (CPI) at 5:30 p.m., the Eurozone’s July ZEW Economic Sentiment Survey at 6:00 p.m., and Germany’s July ZEW Economic Sentiment Survey at 6:00 p.m.Since major U.S. economic indicators are limited, the euro’s reaction to the ZEW Economic Sentiment Survey is likely to be a key factor during European trading hours, while developments in the Middle East, crude oil prices, and U.S. interest rate trends are likely to drive the market during New York trading hours. We will closely monitor whether the USD/JPY pair can recover to the mid-162 yen range and whether the EUR/USD pair can hold steady in the low 1.14 range.