The dollar-yen pair was in the 135-yen range at the Tokyo market at the beginning of the week. After noon, there was a scene where the level temporarily exceeded the 135.19 level, which was the January 2002 high of 135.15 level. It was the highest level since October 1998.
Recently, the dollar-yen pair is accelerating. The US economic indicators released in June showed that the US economy is heating up, including the US employment statistics and the US consumer price index.
The market has fully factored in a 0.50 percentage point rate hike at the US FOMC this week. Furthermore, there is a widespread view that the rate will be raised by 0.75 percentage points with a degree of weaving of about 25%.
For the dollar-yen, the difference in the monetary policy stance between Japan and the United States is widening further, and it is difficult to determine how far it will continue to rise.
However, it is necessary to take a breather in the market. In the short term, adjustments are often made at the timing between events. I would also like to consider the fact that a sharp figure of 135 yen and a well-separated timeline such as the high price level for 20 years are likely to induce profit-taking movements.
Observation of an accelerated pace of US interest rate hikes will be a negative factor for the stock market. Both the strong dollar and the strong yen may cross risk aversion, and the current dollar-yen exchange rate is likely to be a nervous move.
At 135 yen, it seems that Japanese yen is being repurchased in the short term. However, I think that the USD will continue to rise, so I am buying USDCHF from Tokyo time today assuming this.
