The dollar-yen exchange rate fell again today in the Tokyo market, widening its lows from below the 131 yen level to the 130.41 level. After that, the return did not reach the 131 yen level. The cross-yen is also declining at the same time, resulting in a strong yen market. The fact that the US Fed’s policy of aggressive interest rate hikes has changed somewhat has reversed the wheel of dollar buying and yen selling so far. In addition, it was reported yesterday that Speaker of the US House of Representatives Pelosi, who had been wary, will visit Taiwan. Pelosi is expected to arrive in Taiwan at 23:20 Japan time.
This year’s dollar-yen exchange rate surged from the 113-115 yen zone to the 139.39 level, but the trend is currently reversing. The rate of decline is also fast, and it is easily falling below the 131.15 level, which has recovered 31.8% in the process of rising from 25 to 6 yen. In the immediate future, the psychological level of 130 yen and the half price level of 126.43 level of this year’s range are likely to be conscious.
In the Tokyo market, the Bank of Australia announced an interest rate hike of 0.50%. However, future interest rate hikes are dependent on data, and there is a change from the traditional stance that interest rates will be raised at every meeting. The Australian dollar is plummeting.
The forward guidance was also abandoned at the ECB Governing Council meeting the other day, and each central bank has announced that it will depend on the data going forward. This seems to indicate that the policy balance between preventing inflation and alleviating concerns about an economic recession is becoming more delicate. Differences in stance changes among the central banks of each country are likely to attract attention in the future.
This week, the results of the Bank of England’s Monetary Policy Committee (MPC) will be announced on Thursday. Although market expectations for an interest rate hike of 0.50% are predominant, the meeting will attract a great deal of attention as to whether it will become more hawkish as it has continued at a pace of 0.25%, or whether it will give rise to a sense of cessation in the future. That’s it. Along with changes in inflation and growth prospects, attention should also be paid to announcements regarding monetary tightening (QT).
As we entered August, we thought that the yen’s appreciation would weaken, but this did not go according to plan, and the strong repurchase of the Japanese yen continues. Yesterday’s CHFJPY buying has already stopped out. First of all, pay attention to how long this return of the Japanese yen will last.
