In the overseas market yesterday, the dollar-yen pair hit a high of just around 137 yen. Along with renewing the year-to-date highs, the dollar has strengthened and the yen has weakened since September 1998. At the ECB Forum, FRB Chairman Powell said, “The US economy is in a position to cope with monetary tightening,” reminding us of further acceleration of interest rate hikes, which led to a stronger dollar. There was a strong message that he wanted to curb inflation at all costs, even though he was wary of a rate hike that would cool the economy.
For the dollar-yen exchange rate, the contrast between the Bank of Japan, which does not change its stance of continuing easing, and the US financial authorities, which show a positive stance of raising interest rates, is even more striking. In the Tokyo market yesterday, former BOJ director Yamaoka said, “If inflation expectations and the outlook for the depreciation of the yen continue to rise, it may be necessary to adjust the upper limit of long-term bond yields.” However, it was immediately pushed back toward the depreciation of the yen. He also said, “The Bank of Japan will not adjust the yield cap next month and may do so within a year,” and thought that there would be no policy changes in the market until after Kuroda retired. It seems.
Today, a series of US economic indicators will be announced. US New Unemployment Insurance Applications (Weeks up to 25th), US Personal Income (May), US Personal Expenditure (May), US PCE Deflator (May), US PCE Core Deflator (May), US Chicago Purchasing Division Association Economic Index (June), etc. The PCE deflator, which is known to be emphasized by the US financial authorities as a price index, is expected to increase by 6.4% from the previous year in most markets. Growth is expected to accelerate further from + 6.3% in April last time. On the other hand, as for business sentiment, the Chicago Purchasing Department Association Economic Index is also drawing attention. 58.0 is expected to be the majority of the market, down from 60.3 in May last time. In line with what Chair Powell said yesterday, we are more wary of rising inflation.
Today, it is assumed that unstable price movements are likely to occur even after the end of the month rebalancing.
I went to buy yesterday thinking that USDJPY would jump above 137.00, but I was pushed by selling and lost.
It seems that it is difficult to make a straightforward flow like the previous week.
