In today’s Tokyo market, there was a scene where the dollar yen was bought up to the 124 yen level again. The Eurodollar has fallen further to 1.08 units. The dollar was bought yesterday by US Federal Reserve Board member Lael Brainard, who said, “We will continue to tighten monetary policy by starting to shrink the balance sheet at a rapid pace at the May meeting at the earliest.”
The market has factored in a 0.5% interest rate hike in May next time, but with the addition of further monetary tightening material, the US bond yield has risen and the dollar buying pressure has increased. The market gaze is suddenly attracted to US monetary policy trends. The minutes of the FOMC will be released today. I want to confirm the strength of the hawkish color.
In the overseas markets after this, the continuity of the strong dollar will be noticed. The Eurodollar is likely to have a heavy upside due to the move to strengthen sanctions against Russia the day before. It is expected that additional sanctions will be announced today from the United States and Europe. It will be developed while keeping an eye on the situation in Ukraine and the trend of US bond yields.
The dollar-yen pair has reached the 124-yen level, which is a turning point, so it seems that buying and selling will be mixed once it has been sold. However, the yen’s appreciation against the BOJ’s remarks yesterday has only temporarily stopped, and the scenario of widening interest rate differentials between Japan and the United States remains alive. On the other hand, the high price of 125.09 level in the sharp market phase is imprinted on the minds of market participants, and the level of oral intervention is also wary. It looks like it will be a reasonable upside price.
Since the USDJPY is approaching around 125 yen this week, we are trading mainly against CHF, thinking that it is easy to be wary of the depreciation of the Japanese yen.
