The August market has started. In the morning of Tokyo, the appreciation of the JPY is reignited. The dollar-yen pair fell from the mid-133 yen level to just below the 132-yen level, and the cross-yen pair also fell by more than 1 yen. The decline in the degree of hawkishness of US monetary policy since last week has been driving the depreciation of the dollar and the appreciation of the yen. In addition, there seems to be a sense of uncertainty about the spread of recession risks, as indicated by the worsening of China’s PMI. However, in the afternoon, Shanghai stocks and Hong Kong stocks became reluctant to fall, and there is a feeling that the selling after receiving the PMI has come to an end. Despite the risk of a strong yen, the market is currently showing a calm development.
Monetary policy announcements are scheduled for this week, including the Bank of Australia tomorrow and the Bank of England on Thursday. In both cases, the market expects a 0.50 percentage point increase in interest rates. However, as was shown at the US FOMC last week, the possibility of future economic slowdown risks cannot be denied. We would like to assume that the USD/JPY will again come under selling pressure as the AUD/JPY and GBP/JPY depreciate.
First of all, the movement on the first day is the depreciation of the US dollar and the appreciation of the yen. The US July ISM Manufacturing Index will be released, so pay attention to the movement of the US dollar after this.